Nothing is a sure thing in exterior remodeling or anywhere else. But as contractors look to the New Year, they can bet that certain trends will affect their business in 2018 — and do their best to either prepare for the impact or capitalize on the opportunity.
Here are three trends that will define 2018 and how best to deal with each:
1. Tax reform
The first change to the nation’s tax code since Ronald Reagan was president is sure to have a major impact on contractors. But whether that impact will be positive or negative seems to depend on whom you ask. The NAHB praised passage of the reform and said it will create a “more favorable tax climate for small business.”
But others aren’t so sure. Nearly 60% of small business owners say the new tax code favors the wealthy and corporations over small business, according to a survey by Businesses for Responsible Tax Reform. Whatever your feelings about the new tax code, business owners will need to become familiar with a whole new lexicon to ensure they’re getting the best shake. Designations such as pass-through corporations, new tax brackets and elimination of long-held tax deductions are just some of the considerations.
As the year moves forward, and this sprawling new tax code is examined and understood further, business owners will need to be on the look out for how to best turn tax reform to their advantage.
2. Extreme weather
Unprecedented hurricanes and fires ravaged the country in 2017. And already, extreme weather is defining 2018 with much of the country locked in a deadly deep freeze that’s making contracting work all but impossible in some areas. Of course, the same weather that’s gumming up the works right now, will lead to a bonanza of business once melting begins and the full scope of the damage from the latest snowpocalypse becomes apparent.
While these types of weather events used to be the exception, they’ve now become the norm. In fact, over the last three decades, the number of weather-related loss events in North America grew by a factor of five, according to a recent report from the American Academy of Actuaries. The best bet for contractors in a climate changing market? Cozy up to insurance adjusters and learn how to work in the world of restoration.
Also, consider adding whole-house backup generators to your services. “In the wake of hurricanes in Texas and Florida, people are realizing no state is immune from a natural disaster that can make your home lose power, making life at home very uncomfortable,” said Dan Bawden, NAHB Remodelers Chairman.
3. Legal pot
The legalization of marijuana was already confusing contractors nationwide. But as of Jan. 1, pot is now legal in one of the largest contracting economies in the nation — California. Medical marijuana has been legal in California for more than two decades, but the arrival of recreational marijuana is expected to create the largest legalized cannabis industry in the world. Pot is also now sold legally down the entire length of the West Coast, plus Alaska.
In this environment, human resources experts say employers need to update their employee handbooks to include the drug and treat it similar to alcohol. Make sure employees review and sign the new document to acknowledge they understand the new policy. Although employers may think they don’t have a problem with marijuana in the workplace, statistics suggest otherwise.
For example, 22% of American adults use marijuana — more than 54 million people — and 63% of this group say they use it regularly, according to a 2017 Yahoo News/Marist poll. And that use can have deadly impacts. Traffic deaths in Colorado involving drivers who tested positive for marijuana more than doubled from 2013 to 2016, according to a federal government study. The report also noted a 35% increase in emergency room visits related to marijuana.
