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Shortages Delaying Pool Construction

A series of shortages are causing pool construction delays across the nation

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A series of shortages are causing pool construction delays across the nation

Shortages continue to plague the pool industry and have now begun to cause tremendous delays for pool builders. Experts say a serious plastics shortage is trickling down and impacting builders across the pool industry. Diminished supplies and rising costs for raw materials are causing prices to skyrocket with distributors. Supply chains have been dramatically affected by a recent surge in demand for pool products as well as the COVID-19 shutdowns. As manufacturing plants begin to come back online, many in the industry are beginning to wonder if it’s too little too late to save this year’s pool season. Supply delays are already causing serious problems for pool builders across the nation and the situation looks to only be getting worse as the season goes on.

Shortages Cause Distributors to Raise Prices

Across the board – prices for chemicals, components, and machinery have gone up with major distributors. PoolCorp announced price increases earlier this year that are set to start on May 3, 2021. Many pool companies however, have reported wide spread price increases from other distributors in the months prior to the announcement taking effect. Stock on many essential components are in short supply due to Covid causing a series of wide spread factory slowdowns. This following an unprecedented demand for pool and spa goods in 2020.

Hurricane Laura sparked a fire at one of the main chlorine production plants, shutting down more than 40% of the chlorine tablet production in the United States. We have seen significant price increases on chemicals, especially chlorine. The price for chlorine tablets is predicted to increase up to 50% by mid July according to analysts.

A plastics shortage is creating supply chain gaps in the pool industry for essential parts like PVC Pipes. Experts are reporting that the recent Texas freeze took a large percentage of valves off the market as well.
A plastics shortage is creating supply chain gaps in the pool industry for essential parts like PVC pipes. Experts are reporting that the recent Texas freeze took a large percentage of valves off the market as well.

Plastics Shortage Impacting The Pool Industry

ISM is reporting a plastics shortage that is already predicted to severely impact the pool industry. Raw material shortages for resin have dramatically impacted supply chains. Dwindling supplies were already tight say leading experts. The recent deep freeze caused by winter storm Uri, took many supplies off the market as pool owners in Texas experienced millions of dollars in unexpected pool equipment repairs.

The Petrochemical industry which is largely based in Texas, was nearly brought to it’s knees during the winter. Uri had disastrous implications on supplies which are impacting the inventory that pool companies have depended on being available for this seasons installation projects.

According to the Wall Street Journal, which cited S& P Global Platts, the freeze in Texas, one of the largest exporters of plastics and other petrochemical products, halted production of 75% of polyethylene, 62% of polypropylene, and 57% of PVC. Texas manufactures about 85 percent of the polyethylene used in the United States, making it the most commonly used plastic in the world. The manufacturing delays have triggered a global plastics shortage.

Maintaining Pricing Structures is Impossible

Maintaining existing pricing structures has already become untenable for pool service companies due to the rising costs of chemicals like trichlor and dichlor. Many pool service companies have begun to send out announcements to customers to expect price increases on weekly pool service this season. “We have absolutely no choice” said Mike Pompura of Pool Masters in Corona, CA. “Distributors have raised their prices considerably this season and unfortunately we are going to have start passing these price increases on to our customers.”

Pompura who has run his pool service company for the past two decades, says he has never seen conditions like this before. “I’ve been in business since 2001 and this is the worst I have seen it. We are having problems getting valves. PVC has also gone way up this year” said Pompura.

The problems Pompura is experiencing seem to echo the sentiments of many pool companies sounding off in pool industry groups on social media. The stress on plastic supplies and a surge on demand for resins are causing bottlenecks in the supply chain across the nation. Experts cite a number of causes for ongoing delays including port closures, over the road capacity shortages, and an increased demand on plastics for food packaging and PPE.

Many in the industry think the Covid-19 relief bill has inadvertently caused a serious labor shortage.

Emile Stinchcombe of Aqua Guard Pools in Detroit says the problem is bigger than just a shortage of materials. The Covid-19 relief bill has provided extra stimulus to the point where the industry finds itself suddenly short of skilled labor during the busiest months of the pool season. “We have a serious shortage of labor this year. Suddenly everyone wants to stay home and collect unemployment instead of work for a living. I’ve never seen anything like it in all my years in the pool industry.” said Stinchcombe.

Winter storm Uri hit petrochemcial plants in Texas and Louisiana hard. Many industry experts fear that supply chains have not yet recovered to make a meaningful impact in time for this years pool season. This could very well be why major distributors are hedging their bets by stating that further price increases may be just around the corner.

Shortages Causing Prices to Soar

One thing is certain, with raw materials increasing in price – consumers can be certain to feel the trickle down effect in their wallet this pool season. The price of an inground swimming pool is predicted to increase 15-25% in most markets throughout the United States this year in comparison to last year. This is on par with the rising costs of raw materials like lumber contributing to an expected additional $36,000 to the price of average new home construction this year.

In addition, timelines for completing inground pool projects have also been dramatically impacted. There is an enormous backlog of homeowners waiting just to get on the list for pool construction. Consumers can expect extended timelines for construction to go up from the typical timeframe of 6-8 weeks to now 3 months or more in many areas of the country.

Shortages are causing delays with construction as materials become scarce and what supplies are left now go for a premium.
Shortages are causing delays with construction as materials become scarce and what supplies are left now go for a premium.

The news does not bode well for homeowners like Penny Lopez in Las Vegas who contracted with her pool builder back in January and is still waiting for her pool to be finished. “We were told that we would be swimming by May but I’m still looking at a giant hole in my backyard,” said Lopez, whose story seems to resemble that of other homeowners throughout the Las Vegas region.

The Trickle Down Effects

The pool and spa industry is just one of many industries affected by this crisis. John Schiegg, VP of Supply Chain Services for Houston-based home builders David Weekley Homes, said he’s seeing shortages and price increases on everything from siding to adhesives to insulation. After winter storm Uri, several PVC manufacturers reported to Schiegg they would be unable to meet their contractual obligations. Schiegg said he was surprised to hear distributors in other neighboring states were impacted as well.

New York based Confer Plastics, manufacturers of pool ladders, steps, and spa accessories; said they would be unable to deliver products planned or scheduled. They’ve already been forced to layoff 40 employees. Vice President Bob Confer said he’s never seen a situation like this in his 47 years in the industry. Confer Plastics is far from the epicenter of the Texas freeze but is still experiencing the long range ripple effects as are many other manufacturers throughout the pool industry.

4.9/5 - (23 votes)

Editor in Chief of Pool Magazine - Joe Trusty is also CEO of PoolMarketing.com, the leading digital agency for the pool industry. An internet entrepreneur, software developer, author, and marketing professional with a long history in the pool industry. Joe oversees the writing and creative staff at Pool Magazine. To contact Joe Trusty email [email protected] or call (916) 467-9118 during normal business hours. For submissions, please send your message to [email protected]

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Landslide Damages Homes, Destroys Swimming Pool in California

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Landslide Destroys Home, Damages Swimming Pool in California

A landslide wreaked havoc in Sherman Oaks early Wednesday morning, causing millions in damage and virtually destroying one homeowner’s swimming pool. The catastrophe unfolded at around 3 a.m. following reports from residents in the 3700 block of North Ventura Canyon Avenue, who noticed downed power lines and a large tree fallen into a backyard, as detailed in a press release by the Los Angeles Fire Department.

Upon arrival, firefighters encountered a significant portion of the hillside had shifted downward, endangering at least three homes and inflicting heavy damage on another under construction. Video footage captured by OnScene.TV revealed a gaping crack splitting through the backyard of one residence, with a section of the home visibly tilting to one side.

While no injuries were reported, several individuals were evacuated from at least one home, with firefighters resorting to pumping water out of a swimming pool to alleviate additional strain on the hillside. Unfortunately, part of the pool and home ultimately collapsed down a 30-foot cliff destroying another residence that was still under construction.

Responding to the crisis, the Los Angeles Department of Building and Safety initially deemed one home unsafe, red-tagging the structure. However, their assessment later extended to two homes deemed unsafe and a third severely damaged, marked with a yellow tag. Ongoing drone surveys by firefighters aim to assess the extent of the damage and potential risks.

At present, the exact cause of the landslide remains undetermined, according to LAFD spokesperson Nicholas Prange. Requests for comment from the Los Angeles Department of Building and Safety went unanswered.

Authorities seized the opportunity to remind residents of the necessity for year-round emergency preparedness, emphasizing the looming threats posed by wildfires and heavy rainstorms capable of triggering landslides.

The unfortunate incident follows March’s heavy precipitation in Southern California, with Sherman Oaks experiencing 1.95 inches of rainfall over March 6th and 7th, as reported by the National Weather Service.

4.9/5 - (12 votes)

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BofA Downgrades Latham Group Citing Weak Pool Construction Market

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BofA Downgrades Latham Group Citing Weak Pool Construction Market

Latham Group (NASDAQ: SWIM), a prominent player in residential swimming pool construction, faced a setback as Bank of America downgraded its stock due to concerns over sluggish new pool construction and increased decrementals.

With the downgrade, SWIM’s stock plummeted by 23.78% during pre-market trading on Wednesday, settling at $2.50, marking an 11% dip below its 200-day simple moving average.

Bank of America revised its recommendation on Latham Group stock to Underperform, slashing the price target from $4.50 to $2.60.

In its 2024 guidance announcement, SWIM projected revenues between $490M and $520M, falling short of the consensus estimate of $533.09M. Similarly, adjusted EBITDA guidance ranged from $60M to $70M, representing an 8% to 35% decrease compared to previous expectations.

The downgrade stems from a sluggish start to 2024, subdued projections for new pool construction, operational challenges leading to deleverage, and constrained free cash flow.

Management anticipates a 15% year-over-year decline in new pool construction for 2024.

These developments contrast with the optimistic sentiment among some sell-side analysts, who maintain a Buy rating on SWIM with an average price target of $3.54.

Scott Rajeski, President and CEO, stated, “Latham navigated a very difficult market environment in 2023. We successfully implemented cost reduction programs and lean manufacturing initiatives that structurally reduced our cost basis, while maintaining our investments in future growth. These cost reduction programs improved margins as the year progressed and we expect they will enable us to considerably expand margins and overall profitability once volumes recover. At the same time, we increased productivity and efficiency for our dealers, developed new fiberglass pool models, and invested in digital tools that have enhanced the consumer’s pool buying experience. As a result of these actions, Latham is positioned for meaningful market share gains as overall industry conditions improve.”

5/5 - (7 votes)

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Fluidra Launches €20 Million Venture Capital Fund – Fluidra Ventures

The company will invest €20 million in tech-based startups that offer emerging solutions that can enhance the pool and wellness sector.

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Fluidra Ventures

Fluidra, a global leader in connected equipment and solutions for the pool and wellness sector, is launching Fluidra Ventures, a €20 million corporate venture capital fund (CVC) investment to lead innovation in the sector.

The CVC will invest in each startup with the potential to revolutionize the industry on a global scale through their solutions, with a special focus on the United States and Europe. The goal of this first three-year phase is to build a solid portfolio of startups through investing in innovative companies.

The CVC will target startup initiatives that enhance efficiency, connectivity, sustainability and safety in the swimming pool and wellness business, leveraging IoT, computer vision and robotic solutions. It is looking for startups that add value to the pool and wellness sector with innovative business models, fostering direct customer interaction through sales, subscriptions and other channels. The CVC has already invested in Coral Smart Pool, a technology company aiming to transform the pool experience through Artificial Intelligence (AI) with an initial focus on pool safety.  

Fluidra Ventures will also invest in companies that innovate in engineering and science to advance materials and products that deal with swimming pool manufacturing, efficiency and maintenance.

Four segments and eight strategic guidelines

The fund is focused on four different segments — Commercial, Residential, Wellness and Mass Market—and has an investment thesis that covers eight strategic guidelines, from connected pools, resource optimization, digital platforms, innovative materials, security systems, personalized experiences, robotics and innovative consumable products.

Fluidra Ventures is fueled by Fluidra Lab, Fluidra’s open innovation division, and any startups that want to submit their proposals can send their investment pitch decks to [email protected]. Offering more than just investments, Fluidra aims to leverage this initiative to become the top strategic collaborator for the most innovative startups with the tremendous benefits that being an industry leader brings, such as: resources, scale successful business models, expertise, experience, and sales options.

“This initiative joins several others that we have at Fluidra to promote innovation in our industry. This is why here at Fluidra Ventures we’re excited about the transformative potential that this venture will have for the pool and wellness industry, driving forward innovation, sustainability and technological advancement”, said Eloi Planes, Fluidra’s Executive Chairman.

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