Momentum is squarely in the American Supply Association’s corner.
That was evident by the record-breaking attendance at the group’s Network2015 event at the Chicago Marriott Downtown Magnificent Mile. This year’s Network gathering attracted a record 123 distributor companies, while a total of more than 760 top industry professionals attended the three-day event that was loaded with networking and educational opportunities.
ASA, which enjoyed a fourth year in a row of net membership growth in 2015, has more than doubled distributor attendance at the industry’s signature event in the last six years. In comparison, the 2009 Network production attracted representatives from 60 distribution companies.
As usual, one of the most popular sessions at Network was the 2016 industry forecast, which this year was presented by ITR Economics’ Brian Beaulieu, the brother of frequent Network and industry presenter Alan Beaulieu.
Beaulieu noted the economy is in a current slowdown mode, but nowhere close to where those in the PHCP-PVF industry should hit the panic button. “The economy is slowing down even though wholesale trade data has accelerated,” he said. “We think the slowdown is going to by minor. We see a growth rate of 5% and we see that stretching through 2017.”
At the same time, Beaulieu said businesses should keep an eye on interest rates. “There will be rising rates in 2016 and 2017 even though there is no inflation out there yet,” he said. “Are you ready to be a whole lot busier over the next several years? And if the demand is that great don’t be afraid to raise prices because there is inflation in the future. We will see more inflation in the next 15 years than we’ve seen in the last 15 years. Work at being less price-centered. From a broader perspective, prices are going to be rising in numerous geographies because wage rates are going higher all over the world. Additionally, the U.S. makes up 22.5% of the world economy. No one is taking our place for the next 15 years.”
Beaulieu had some decently good news for the ailing industrial PVF sector linked to oil and gas prices. “We expect commodity prices to go up in the second half of 2016 and continue rising in 2017,” he said. “Right now, if your business is related to the oil patch, there is not much going on there. The best chance is a mild rise in the second half of 2016 in certain areas. For the first half of 2016 we hope for stability. We’re forecasting $58-$62 barrels at the end of 2016, which is good enough to turn the fields and wells toward profitability. Unfortunately we don’t see it getting into that $75-$80 barrel range without a major supply disruption in the Middle East. Eventually we will see broad-based healing coming to the oil patch.”
Beaulieu added with interest rates at current favorable numbers, investing in one’s business is a good idea. “Interest rates are exceptionally low,” he said. “They are going to go up as more and more inflation shows up in the economy over the extended future. We see a mild recession in 2019, but we don’t see anything bad happening until around 2030. We have a 14-15-year good run in front of us, so invest now while interest rates are so low. You should be out there borrowing money like there is no tomorrow. Invest in your businesses. If you are sleeping through the night, you have not borrowed enough money. You need to get back in touch with your entrepreneurial self. Invest in yourself and use other people’s money to do it.”
In good hands
During the annual meeting and member lunch, which drew an overflow crowd, ASA leaders spoke of the association’s continued growth throughout its various platforms. This year, 42% of ASA member companies are using ASA Education Foundation resources, while participation in advocacy initiatives has more than tripled in the last two years. At the divisional level, ASA’s Industrial Piping Division has realized a 23% net membership growth since 2013.
“We feel great with the financial foundation we have today,” outgoing ASA President Rick Fantham (Hajoca Corp.) said. “When I started as president I talked about jumping into the deep end with ASA. We’ve done that with our education, networking, advocacy and benchmarking platforms. ASA is in great shape. In 2016 when Tim Milford (incoming ASA president, Milford Supply) is up here, I am confident he will be talking about 2016 being an even better year for ASA.”
ASA also revealed the results of its extensive 2015 national labor study conducted by GMP Research. The study shows a total of 6,089 industry-relevant branches in existence employing some 205,000 individuals. Out of those branches, 88.5% have between 1-10 employees and males comprise the majority of full-time employees (73.8%) working in the industry.
Looking to the future, the survey shows 25% of plumbing and heating wholesale-distributor employees will be retiring in the next 10 years. “In 10 years that 35-45 age bracket will not be there,” GMP Research’s Victor Post told the lunch audience. “A core element of the workforce won’t be there unless we take drastic actions to recruit workers into the industry.”
Honoring two greats
TORRCO’s Joel Becker is the recipient of the 2015 Fred V. Keenan Lifetime Achievement Award. Becker received the honor during the annual meeting and member lunch. “ASA opened my eyes,” Becker said. “It has been my lifeline to innovation.”
During the Kohler and ASA Plumbing Industry Educational Forum Breakfast, APR Supply’s Randy Tice was honored with the Plumbing Division Award of Excellence. “It’s been a good ride,” said Tice, former president of ASA and HARDI. “Part of my DNA is being involved in associations. Being part of these associations has allowed me to have many opportunities and it’s one of the major reasons we’ve been successful all these years. I want to thank ASA for being such a great association.”
First Supply, Plumbing Distributors, Inc., Valley Supply Co., NIBCO and PRIER Products are the recipients of 2015 ASA safety awards.
Supply House Times columnist and UnleashWDfounder Dirk Beveridge kicked off Network with his general-session seminar on innovation. Other speakers included Anthony Huey (negotiating skills and answering difficult questions), David Nour (leadership strategies for the age of connected relationships), Robert Gross (ownership succession planning) and Marc Edwards (aging infrastructure). Another session featured a panel discussion on disaster preparedness. To read more about Edwards’ topic of discussion, see Editor Mike Miazga’s column on Page 6.
Former NFL quarterback Ron Jaworski was the featured speaker at the ASA IPD Industry Educational Forum Breakfast, while former Reagan aide Dinesh D’Sousa spoke at the Kohler and ASA breakfast. Retired U.S. Navy SEAL Marcus Lutrell closed the event with his keynote speech during the A. O. Smith Future Trends Luncheon. Attendees also heard panel discussions on the role of master distribution in the supply chain and the evolving role of the manufacturers representative.
A series of rotating Meet the Pros roundtable discussions also proved to be a big hit, as did the annual distributor-vendor conferences (838 meetings were scheduled during a nearly four-hour timeframe). Meet the Pros topics included hiring (Doug Dillon, ASA Education Foundation), marketing (Dan New/Jeff Stevens, Mid-City Supply), employee compensation (Scott Robertson, Robertson Heating Supply), mergers and acquisitions (Scott Weaver, APR Supply), succession planning (Brian Tuohey, Collins Pipe & Supply), innovation (Beveridge) and customer service (John McKenzie, Winsupply).
Another highlight of the convention was Bradley Corp. and ASA (via its Young Executives Division) presenting a check for more than $55,000 to Operation Rise & Conquer, an organization that sends severely disabled veterans or recovering active-duty service members on a week-long outdoor adventure program in the Colorado Rockies.
Network2016 takes place Sept. 28-30 at the Waldorf Astoria in New York City. Confirmed keynote speakers include Dana Perino (former George W. Bush White House press secretary), Neil Cavuto (Fox News) and former CIA Director General Michael Hayden.
Video interviews with TORRCO’s Becker and APR Supply’s Tice can be viewed at www.supplyht.com/videos.