As the pandemic drove everyone into their homes last year, the United States saw a burst of economic growth fueled by substantial remodeling and building efforts. And experts predict that strong economic expansion will continue for the remainder of 2021 and into 2022.

While the housing, plumbing and related industries have benefitted, they also have dealt with some hiccups related to labor shortages, supply chain issues and high materials pricing. 

Plumbing Manufacturers International (PMI) is working with its members to build on the bright spots while finding ways to innovate and push through the challenges. For example, the plumbing manufacturing industry is using inventive approaches to find job candidates, enhance water efficiency, and design fixtures and products to help protect the public’s health.

We also see some distinct housing trends and issues impacting manufacturers, suppliers and builders. The need to focus on diversity, equity and inclusion (DE&I) to bring fresh perspectives, innovative ideas and wide-ranging contributions has never been more important. Plumbing manufacturers are strengthening their engagement in this critical area. 

Post-pandemic home remodeling and the need for larger homes to accommodate more Americans working from home are providing plenty of positive outcomes for our industry, with plumbing fixtures and related installation services continuing to be in great demand. 

The trend for more green homes is here to stay. As a result, PMI members designed more plumbing fixtures that not only save water and energy but also help better protect public health — especially as more people worry about the spread of infectious diseases.

Let’s take a closer look at some of the economic factors and construction demands driving these trends.

New Housing Construction, Home Renovations Surge

As more Americans receive vaccinations, our economy is literally getting a much-needed shot in the arm. Low mortgage interest rates and government stimulus are helping, too. Many Americans are using some of that funding to renovate their homes or build bigger ones. 

Our nation’s gross domestic product is expected to grow by about 6.7 percent in 2021, which will make this the best year for economic growth since 1984. Robert Dietz, chief economist and senior vice president of economics and housing policy for the National Association of Home Builders (NAHB), shared that bit of great news along with many other economic and housing insights during PMI’s Legislative Forum in June.

Meanwhile, the construction and related industries are trying to keep up with the growing demand for more housing. Builders scramble to fill a housing deficit caused by under-building from 2012 through 2020; this deficit has been deepened by Americans’ demand for renovations and larger homes to accommodate new work-at-home routines. 

Dietz noted a 12 percent growth rate in single-family housing starts in 2020; this rate could bump up to 14 percent in 2021, with housing starts remaining close to 1.2 million. However, expectations should be tempered as lack of skilled labor, high material costs and economic concerns will challenge that growth rate, the NAHB explains. 

Home sizes are trending up as people add new office spaces, additional bathrooms and larger kitchens. Our PMI Market Outlook for second-quarter 2021 noted the median size of a single-family home was 2,301 square feet in 2019; the median size of all U.S. homes is 1,715 square feet. 

Homes are getting older and in need of repair, with the average home built 39 years ago. This will likely further fuel remodeling activity. Dietz confirms that remodeling activity will grow about 9 percent in 2021, with a bit of cooling off in 2022 and 2023 as interest rates are expected to rise. 

Housing preferences are changing, too, especially with millennial buyers. An NAHB Report titled “What Homebuyers Really Want” confirms that 32 percent of millennial homebuyers are willing to pay more in upfront costs for a home with third-party green certification. They also are willing to pay for green features, especially those providing energy efficiency and cost-saving benefits over time. 

Climate change and widespread droughts across the country are adding to the demand for better water and energy efficiency in homes. 

These positive forecasts have been somewhat hampered by escalating materials prices and supply chain snags caused by the pandemic. Everyone from builders to plumbing manufacturers to suppliers is having trouble getting needed materials while orders continue to back up. 

In May 2021, builders reported to the NAHB that they were having an exceptionally hard time finding appliances, framing lumber and oriented strand board, as well as plumbing fixtures and fittings.

Some of our plumbing manufacturing members described the many challenges caused by suppliers being forced to shut down during the pandemic and the subsequent domino effect of trying to find the critical materials needed to make their products. With demand for plumbing products and building materials skyrocketing, inventory is flying off store shelves faster than ever, causing spikes in pricing. 

For example, second-quarter 2021 average prices for steel, copper and oil climbed above pre-pandemic levels and are up significantly at 52 percent, 75.8 percent and 90 percent, respectively, from one year ago, reports PMI’s “Q2 2021 PMI Market Outlook.” Unfortunately, this means consumers are paying significantly more to renovate their homes or build new ones. 

Labor Lags, Inspiring Creative Searches and Incentives 

Although more people are getting back to work, many job openings still need to be filled — particularly in the construction trades and manufacturing sector. With growing competition for workers, manufacturers are competing with the service sector for employees, notes the Wall Street Journal. 

Before the pandemic, many manufacturers were already understaffed. About 38 percent said they had trouble finding candidates with the right skills, according to a recent Workforce Institute at UKG report on “The Resilience of Manufacturing.” By April 2021, that number had shot up to 54 percent.

This has sparked manufacturers, including some plumbing manufacturing companies, to get creative with their talent searches and skills training. They’re doing things such as offering higher wages, recruiting people with nontraditional experience or who have been out of the workforce for long periods, and re-training and cross-training current employees. 

PMI members Delta Faucet Co. and Hansgrohe took part in parent company Masco’s Talent Exchange Program to promote collaboration and provide professional development opportunities for employees, a Delta blog article notes (https://bit.ly/3AbhrDf). Employees with certain skill sets, such as experience automating manufacturing processes, travel to various company locations to share and apply their knowledge. 

The positive results from this type of program offer employees opportunities to stretch and learn new skills, build diverse and supportive networks and, ultimately, help grow their companies.

Investments in DE&I will be critical to help solve the labor shortage, as well as to welcome a wider range of experiences and perspectives to manufacturing and the construction trades. PMI and the plumbing manufacturing community recognize the continuing challenges that must be addressed around social justice, race and equity issues. 

To support our members’ DE&I efforts, PMI established an annual DE&I budget along with plans to create new tools, resources and community engagement activities. We’re seeing more of our members either starting or building up their DE&I programs as they compete for talent, consumer preference and market share.

Construction and related industries are bouncing back nicely, even as labor issues, supply chain interruptions and high material prices cause some complications. Those challenges brought out the best in plumbing manufacturers as they stepped up innovations in the areas of products, people and protecting public health. 

As more Americans get vaccinated and our economy continues to open up, it will be exciting to see what new opportunities lay ahead for all of us. 

Kerry Stackpole, FASAE, CAE, is the CEO/executive director of Plumbing Manufacturers International. Stackpole has spent more than two decades leading trade associations in manufacturing, technology and services. Contact him at kstackpole@safeplumbing.org.