If it ain’t broke, customers in Orange, Calif., ain’t fixing it, according to Sundance Plumbing Services in Orange, Calif. Here, technician Eric Torres jets out a main line. Photo courtesy of Sundance Plumbing Services.

E veryone needs a plumber at some time or another, right?
    That may be true in principle, but the reality of the situation is that many service, repair and remodeling plumbing contractors are suffering through a downturn in the economy, just like the average Joe and Jane trying to make it from paycheck to paycheck. Couple a lack of dollars being spent on repair and remodeling projects with the rapidly rising cost of the fuel needed to field service and repair vehicles and contractors’ 2008 bottom line projections may be looking a little bleak.
    Harry Jacobson of Jacobson Plumbing in Cave Creek, Ariz., assessed the situation this way: “New construction in the area has been completely wiped out, remodeling has dropped off and there haven’t been many tenant improvements, and with repair work people seem to be waiting longer than usual unless it’s an emergency. It’s been like this for the past five or six months.”
    A downturn on the residential front during 2008 was, indeed, predicted months ago. The 2007 Reeves Journal Western Trends Survey, published in the January, 2008 issue, revealed contractors in the West were beginning to become nervous about the residential sector, with 49 percent of responding contractors saying residential work in their areas had slowed during 2007 compared to the year-before period, and fully 82 percent respondents predicting residential construction would either stay the same or decrease during the 2008 calendar year.
    Jacobson owns a small firm of two plumbers and believes that, because people are hurting for money, they’re being much more frugal in spending what dollars they have left in their pockets.
    “Foreclosures in this area have been enormous, which has put a financial strain on people,” Jacobson said. “The slowdown in new construction has affected most plumbers around here, but fortunately I wasn’t heavily into it because I was selective about who I worked for.”
    Jacobson Plumbing performs service, repair, tenant improvement and remodeling plumbing services in the Cave Creek region.
    “Remodeling is the first thing that’s been put off by homeowners,” Jacobson said. “That new kitchen or bathroom will be delayed as long as possible. And other folks will try to fix faucet drips themselves or wait until they have two or three problems and then call the plumber to do them all at once.”
    Jacobson said the most common type of remodel he sees are kitchens, which tend to be more trendy and can be done relatively inexpensively for the impact they have on a house. On the other hand, he noted, bathrooms tend to get very expensive very quickly.
    Mark Giebelhaus, president of Marlin Mechanical Corp. in Phoenix, said the company does about $10 million a year in revenue and has between 70 and 80 plumbers on staff. Marlin Mechanical’s specialty is new construction, especially apartment complexes, as well as service for both plumbing and air conditioning, which comprises about 25 percent of the firm’s total revenue.
    “The slowdown in single family homes drove the new construction of apartments, so the past couple of years have been very good for us,” Giebelhaus said. “But we’re in a bit of a lull now with new apartment construction, but overall business is still good, probably attributable to all the foreclosures.”
    While Giebelhaus believes that service plumbers are not getting the hours of work they were a year ago, he thinks that, with Arizona’s air conditioning season kicking in, that business will pick up.
    Marlin Mechanical dealt with rising fuel costs as they occurred, Giebelhaus noted, adding fuel surcharges to service invoices a couple of years ago as fuel began its upward spiral.
    “We addressed the company’s fuel usage at that time by limiting employee trips into the office,” he said. “For instance, instead of having employees return to the office to pick up a check, we either direct deposited it for them or mailed a payroll check to them. We also parked our big delivery truck and are using a Toyota flatbed that gets better mileage.”
    Dusty Cook, owner of Dynamic Plumbing in Pasadena, Texas, has been in the plumbing business since 1966 and has actually picked up business since the first of the year.
    “I got a big rehab project going on an industrial site,” he said. “Our fast food business is growing pretty quickly.”
    Cook said that the upturn in business he’s seen has been mostly in the commercial service and repair area, where approximately 70 percent of his revenue originates.
    Respondents to the 2007 Western Trends Survey predicted the commercial, industrial and institutional market segment was to remain fairly robust during 2008, even as the residential side slowed. Indeed, the outlook for CII work in 2008 was predicted to be very optimistic, with some 41 percent of respondents to the 2007 survey predicting a pickup in CII business during calendar year 2008.
    As a side note, Cook said at least one type of “green” product is drawing a lot of nibbles from curious customers, but few are actually biting just yet: “We get a lot of people asking about items like tankless heaters, but only about 10 percent actually purchase them because they’re more expensive and you usually have to upgrade the gas lines,” Cook said. “We generally get a lot more inquiries than we do installs.”
     Tim Chapman, one of the owners at Pope Plumbing in Dallas, said he has six service trucks in the field, 15 full-time employees on staff and the company does both service and repair and new construction work.
    “We’re in the position of almost helping people make their own repairs,” Chapman said. “A lot of the calls we get are to come out and help the homeowner with a valve or fireplace or faucet. Many people are doing their own remodels and then need assistance, which is where we come in because they get into a bind and need a plumber.”
    Chapman, who specializes in remodeling, service and repair, said the slowdown began in December of last year and has only gotten more severe.
    “The price of gasoline has taken its toll,” he said. “We’re running around town, giving estimates to people who are trying to fix their own problems. Normally, we’d charge $39.50 for an estimate, but in many cases we’re waiving that.”
    Chapman said he’s bidding a lot of commercial work these days, such as retail establishments and restaurants. He thinks there’s a lot of opportunity to be had in the area and has been awarded some of that type of work.
    “Right now, the service side of my business is about half commercial and half residential,” he said.

Dutton Plumbing in Simi Valley said the economy has made for a volatile market and that many customers are frustrated these days. Here Dutton technician Ricky Pilakowski confers with a colleague on the surface. Photo courtesy of Dutton Plumbing.

    Troy Neerings, of Neerings Plumbing and Heating Inc. in Salt Lake City, took over his grandfather’s business from his father in 1985 when his dad retired, and continued the service, repair and remodel concept.
    “We’ve noticed about a 2 percent drop in sales year-to-date, and the same month [April] from 2007 to 2008 is about 20 percent down,” Neerings said. “Some months are better than others, but we’re hearing from other plumbers that they’re feeling the pinch too.”
    Neerings has noticed a drop in replacement requests for new furnaces and air conditioning units.
    "We’ve been hit pretty hard in that area, but there’s still a lot of emergency work that we do in those categories,” he said. “And, in addition, we recently got some really good remodeling jobs.”
    Neerings Plumbing and Heating has 30 technicians in the field and another 10 personnel in the office. It runs a 24-truck diesel fleet, servicing both light commercial and residential.
    Ken Tingey, owner of Tingey Plumbing and Heating Inc. in Murray, Utah, has been in business for 23 years under the Tingey name, and in plumbing since 1975, handling mostly service plumbing.
    “We do some residential [building work], in the range of $700,000 homes and up, but the bulk of our business is residential service repair and light commercial,” Tingey said, estimating that work at this time of year is running between 30 and 40 percent slower than usual.
     “We’re still seeing the ‘must-do’ jobs on the market, but we’re encountering five or six other plumbers waiting to bid the job,” he said. “You almost have to give the work away to get those jobs.”

Fuel costs are beginning to impact operations at Peterson Plumbing in Grand Junction, Colo., where it’s not unusual for techs to rack up 300 miles by the end of a day’s service calls. Photo courtesy of Peterson Plumbing.

John Burwell Jr., general manager of Peterson Plumbing in Grand Junction, Colo., is nervous because his area isn’t experiencing the angst of the rest of the country.
    “The public is nervous because of what they’re hearing, but I don’t think we’re in a recession here,” Burwell said.
    Peterson Plumbing does residential and commercial repair and service, heating and cooling, remodels, drain cleaning, and commercial property management work. The company has 27 employees, 18 service vehicles and handles the biggest service area in western Colorado with a population of about 130,000 people.
    “It’s not unusual for us to travel 300 miles by the end of our service calls,” Burwell said. “But the cost of fuel is having an effect on our business. Our fuel costs increased $2,000 a month, but we still haven’t instituted a fuel surcharge yet. But it may be in the cards for the future.”
    Terry Cranberry of Angler’s Plumbing Inc. in Camarillo, Calif., has owned the business since 1996 when he started it as a service and repair outfit.
    “Typically, we’re 80 percent remodel and 20 percent service,” Cranberry said. “But now we’re upside down for the last few months and are running about 90 percent service.”
    Cranberry said that fuel costs have drastically affected his company: “We use diesel trucks to carry the weight, but diesel fuel is now above $5 a gallon,” he said. “All of my suppliers are charging fuel surcharges, but we have to remain competitive, so we eat the extra fuel costs.”
    In terms of the remodels that Angler’s performs, about 30 percent are additions with bathrooms, 60 percent are kitchen and bath remodels, and the remaining 10 percent are a combination of kitchen, bath and additions.
    “We’re seeing a lot of people putting in high-tech water systems and big tubs,” Cranberry said. “And people are adding second stories to their houses and pop-outs with baths.”
    Bill Taylor of Sundance Plumbing Services in Orange, Calif., has owned the company since 1978 and has done service and repair work for the past three years.
    “Most of what we do is new construction for commercial service and repair and some residential,” Taylor said. “We got into the service and repair work for cash flow.”
    Taylor believes that people are putting off arbitrary work in their homes and businesses.
    “Emergencies are okay; they’ll call us,” he said. “Cost isn’t an issue there. But people are holding onto their money to see what happens.”
    Taylor pointed out that his fuel expenditures have gone up nearly 30 percent from the same period as last year. He has two gasoline-powered service and repair trucks and one delivery vehicle.
    “We figured fuel into our fixed pricing so it hasn’t hurt us that much,” Taylor said.
    In terms of what customers are doing, Taylor sees folks holding off on projects.
    “Customers are putting off installing new faucets and replacing noisy garbage disposals,” he said. “Items that are still working, people are living with them.”
    Eric Dutton of Dutton Plumbing Inc. in Simi Valley, California has 35 employees and 13 plumbers running 14 service trucks on service and repair jobs.
    “The economy has made our market volatile right now,” Dutton said. “So customer service is a big part of my job in dealing with customer complaints and issues.”
    Dutton noted that many customer issues are based on frustration.
    “They’ve just filled their gas tank or had to call the plumber and they’re more angry than usual,” he said. “They’re displacing their frustration onto us, which often happens with repair work.”
    The answer, Dutton said, is to do ordinary things extraordinarily well.
    “That means sharpening your marketing, answering the telephones properly, and being sharp in terms of the appearance of your plumbers and the quality of your personnel. We consider it a privilege to work at Dutton Plumbing and are very careful about the image we project to the public.”