Scott Webb Commentary: Economic Canaries Still Chirping

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As a rule, I try to keep a weather eye on the general economy — it’s the single most important factor in how many pools and spas we sell. And sales affect everything we do.

At the macro level, when the flow of goods and services starts to constrict, when confidence wanes, when the movement of cash and capital through the system starts to slow, we in the pool and spa business feel it first because we make the products people cut first. We are the canaries of the economic coal mine.

The canaries I’ve been talking to are not feeling anything but good these days. It remains a superb time to be a provider of pools and spas — the crews are flat out like a lizard drinking and the biggest problem is still finding and keeping enough experienced, sober workers to get the job done.

I only raise the issue because we have seen some slightly troubling headwinds lately — cooling in some housing markets, high inventories in the car market, crazy tight labor markets, small drops in investor and consumer confidence — that, while not ominous in themselves, raise the issue of a downturn. Or at least remind us that slumps are inevitable, and it’s best to look out for and plan for them.

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Because the last one truly ravaged the pool and spa industry, and there’s no question better planning would have mitigated the damage and allowed more companies to survive. (The casualty rate was truly shocking, if you remember: 60 percent in some places. Worse than Pickett’s Charge.)

By better planning I simply mean contemplating what a drop in sales would mean to your business and taking a few prudent measures against that possibility. Everybody has waste and inefficiency in the system. And when times get tough, they make hard decisions to reduce them, but it wouldn’t hurt to consider a more proactive approach.

With all that said, I don’t think we’re headed for a recession this year — there’s no good reason to. Growth last year was better than ever. Economists polled recently by The Wall Street Journal put the chances of a recession in 2019 at a mere 25 percent.

This summer the current economic expansion will celebrate its 10th birthday, making it the longest in U.S. history. Maybe it just goes on forever.

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