Looking ahead to a challenging 2023

BY: Regis Saragosti, CEO, Saniflo North America

It’s that crystal-ball-gazing time of year again — forecast season in America and around the world. Professional and amateur prognosticators alike are asking themselves and others: What will the coming year be like? How can we best navigate through whatever challenges come our way? Is there any way to emerge stronger than ever, or is it just a game of survival?

It's challenging to predict what 2023 will bring, as there are so many, many unanswered questions. For one, according to the experts, a possible recession looms. “Possible”? As far as I’m concerned, the world has been in a recession since June 2022. The definition of a recession is two-quarters of negative growth. Which is why I believe we are in a recession and will still be in a recession entering 2023.

Even if you don’t agree with this assessment, I am sure you will concur that the entire world is at risk of going into recession or facing a serious slowdown, at the very least. Three major factors could disturb any industry in 2023: high inflation, a difficult job market (the lack of skilled trades people), and higher interest rates than we’ve seen in a long while. The plumbing and heating market will be no exception.

Given that general state of affairs, here is my take on several key concerns in 2023 and how Saniflo will respond.

Struggling housing marketing…

As I’ve noted, so much uncertainty in the market makes it next to impossible to predict what 2023 will bring. But what do we know? Interest rates and inflation rates are high. New construction is too low. Because of these three problems, which I don’t expect to fade quickly, I foresee the housing market declining to pre-pandemic levels in early 2020.

We are seeing inflation rates moderating to a degree, so perhaps interest rates will come down sometime in 2023. Maybe we will see some light at the end of the tunnel by the fourth quarter. Until then, we have no choice but to adjust to these negatives and their impact on housing and construction in general.

Supply chain pressures on lead times…

Our industry has seen increasingly long lead times, material shortages, and a continuing imbalance between supply and demand. Underpinning these serious problems is the inability of manufacturers to forecast effectively. This, in turn, has resulted in business decisions that lack sufficient information and supporting data.

It's a dangerous problem. But Saniflo remains aware of our core responsibility to our distributors and their contractor customers regarding supply. We — and our inventories of Saniflo product — are ready for whatever 2023 may bring.

Inflationary pressures on pricing…

As already noted, inflation will continue to be a serious problem for all of us, professionally and personally. How could it not be? But, over the past year, Saniflo did better than most other manufacturers and certainly better than our key competitors on this critical front, and I believe our customers will agree.

Saniflo routinely beats competitor pricing. Why? Because Saniflo is vertically integrated. We do not depend on Asian component manufacturers, which allows us to maintain greater control over our costs.

That said, we are planning price increases on certain products, but being vertically integrated, we can avoid increasing prices on others. We will not have across-the-board increases.

Job market pressures on the supply of skilled labor…

One of the best ways manufacturers can help contractors deal with labor issues is through the time- and labor-savings their products provide. At Saniflo, above-floor plumbing will continue to be a great alternative solution to conventional, below-floor drainage.

Contractors and building project managers need solutions that save valuable time while lessening overall costs. For the installer, these twin savings through affordable plumbing solutions will help them attract more work. For obvious reasons, home and building owners will also embrace above-floor plumbing during the current slowdown.

Saniflo offers many affordable, above-floor, macerating, drain-pump, and lift-station products to install virtually anywhere in both residential and commercial applications — all while avoiding the time-consuming hassle and expense of a typical remodeling project.

Any technology that allows contractors to be more efficient while saving time and money for the end-user is vital and, indeed, poised for growth in 2023 or any other year.

The slow embrace of newer technologies…

There’s good news here. The impact of this negative trend is something contractors can readily counter and minimize! How? By learning about new technologies and by making the necessary changes to their current installation strategies. Their destiny is in their own hands and their willingness to embrace change.

Accepting change is seldom easy, of course — especially in an industry like ours where people always seem to have a particular, preferred and — in their minds at least — “proven” way of doing things. But to keep pace with innovation, to save time and save money and to get more jobs, a progressive contractor adapts to change by offering the best this industry has to offer in the way of products and services. Growing your reputation will inevitably grow your business.

We encourage contractors to work hard, create a dynamic plan of action, and devise marketing strategies that will ensure more business. Know your target customers. Listen to their pain points. Create solutions that will minimize or eliminate them.

In the end, customers will choose whoever delivers the best solutions. Make sure yours are at the forefront of their minds.

Speaking of newer technologies…

We at Saniflo are excited to be working on some new products that we expect to debut during Q4 2023. I cannot reveal much at this stage, but we are going to revolutionize some old-fashioned plumbing products. Stay tuned.

In the meantime, the Saniflo organization in the United States and Canada is very excited about 2023. Yes, it will be challenging, but nothing we have not seen before — difficult, but not impossible. We've developed a strategy that will allow us to get through a potentially tricky year in the best possible way.

We are definitely ready for what is to come.