First of all, who knows where the U.S. and world economy is going to end up after the COVID-19 pandemic. Admittingly, the next few weeks and maybe months look a little bleak, but the long term… not so. Keep your fingers crossed. As roofing professionals we are always looking up anyway, right?
So, what if a recession does befall us (you might argue it’s already arrived), what’s going to happen to the roofing industry? Let’s explore the good things. Take a break. Worry later, even though that certainly won’t get you anywhere.
Is Roofing Recession-Resistant?
The answer is yes…sort of. The forces of nature don’t take a break in a recession. So, when wind, rain, and hail strike hard, recession or no recession, roofers are busy as bees.
In many circumstances involving unexpected blows to the economy, roofing contractors weather the storm relatively well. Property maintenance, repairs, and preventative upkeep is considered by property owners to be vital to preserving their long-term investment. Their home or their place of business is often their biggest investment and they’re less likely to deprive that investment of a chance to stay sound. This is why roofing tends to be a little more recession-resistant than installing a new swimming pool, for example. (Granted, you can drown your troubles away in one of those.)
It’s luxury expenditures that people cut back on in hard times and a roof is not a luxury unless your client is into Tesla solar shingles or Vermont natural slate. Clients that would otherwise go with the highest quality materials might opt for something more conventional during a soft or unpredictable economy, so sure, that could impact some specialized roofing manufacturers and contractors.
When news of a potential downturn hits, homeowners start focusing more on long-term value and savings; essential home improvements that have maximum impact over the long haul. That’s why we often see that demand stays steady, even when homeowners pull back on other improvements due to tightening budgets.
Renee Ramey, Executive Director – Metal Roofing Alliance
Outlays for Renovations and Upgrades
When the economy is roaring, people often lean toward getting the best materials possible for a home renovation. Those who have lived through difficult times, like the recession that began after the real estate bubble burst in 2007-2008, learned a lesson. Make hay while the sun is shining. In other words, they were inclined to spend top-dollar preparing for any future period of dearth, during which it’s harder to justify spending the most for the best.
Predictably, when we come out from the other side of this COVID-19 disaster, people may once again treat their home like their castle. In the meantime, contractors should still expect roofing projects to trickle in, albeit, with some slack-off.
Desire for Energy Efficiency
Smart property owners know that higher quality and properly maintained roofs, vents, and windows equate to reduced heating and cooling bills. And, smart roofing contractors don’t let customers forget that fact. So, as people are generally scaling back in many areas, scaling up to better underlayments, shingles, sealants and flashing could be a welcome side effect of a leaner economy. According to the MRA, research indicates homeowners can save up to 40% on annual energy costs by selecting the right type of roof and installation practices.
The COVID-19 Stimulus… Social Welfare on Steroids!
How will the government respond to citizens’ essential needs for income? How can they preserve the bedrock foundation so that reconstruction can unfold quickly when this crisis blows over?
On March 27th, 2020 the U.S. Congress finally passed an historic economic stabilization package— $2,000,000,000,000 (that’s 2 trillion in case you lost track of the zeros) in federal spending and $6,000,000,000,000 overall (however they came up with that?) This includes $350,000,000,000 in loans to small businesses which can reportedly avoid having to pay those loan-grants back, as long as they retain their employees. So, are those enough zeros to pull us out of a likely economic seizure? We’ll see. One thing you can bet on, recipients of government assistance and those still thriving in the workforce will be trading vacation plans for splurges on their most precious commodity— their property.
Furthermore, if lenders decide to offer mortgage forbearance, people will feel even more equipped to fortify their best investments… no, not their stock portfolios (Last checked, the market was down almost 30% since the beginning of 2020), their homes. A brief hiatus on mortgage payments can really breathe some air into the roofing industry.
Low Mortgage Interest Rates
Recently the Fed lowered interest rates once again. Thousands of property owners are looking at opportunities to refinance and get some cash out of their equity. This can spell opportunity for home improvement service providers, such as roofing contractors.
The Best News of All
This isn’t the 2008 recession. COVID-19 is not a systemic economic issue. Mohamed Ali has been knocked to the canvas, not a 95-lb weakling with no chance of hopping back to his feet.
As the nation and the world ramp up the development of treatments and shelter-in-place policies, the virus doesn’t stand a chance. Even in places with less organized political and societal structure, the virus is running its course and the numbers of affected people are shrinking.
The U.S. has an incredibly powerful economic foundation, unlike it did in the early 2000’s when loans were being doled out like moon pies at a Mardi Gras parade. When the nation and other industrialized countries turn the corner; when fewer and fewer people are diagnosed with the virus and lawmakers start opening up local businesses again, the great economies of the world are going to bounce back with a vengeance.
Stay strong. Hang on. Begin laying your own economic foundation by finding property owners in need, creating opportunities to bid jobs proactively, and stay connected to property owners who will remember you and turn to you in the very near future. We at iRoofing can help. Technology doesn’t hold all the solutions but it can do a lot.
Maybe it’s too early for optimistic ramblings. Besides, we’re just a team of software developers, what the heck do we know about global economics or the Corona Virus? Computer viruses are more our thing.
Kidding aside, we truly hope you, your family, friends, and the community at large gets through this unexpected disaster unscathed.
iRoofing is committed to supporting its customers during these challenging times and we take that responsibility seriously. Thank you for putting your trust in us.