By Jason Cramp
After a number of ebb and flow seasons, the Canadian pool industry had a breakthrough year in 2016. In fact, the total number of swimming pool building permits registered last year was the third most in the last five decades. In terms of historical data, one would need to look to 1988, an anomaly maybe, but 19,695 pools were installed. Prior to this, the bar was set in 1979 when 13,200 permits were registered. Similar to 2012, the last time there was a spike in pool permit registrations, economic uncertainties are still a concern. However, thanks to low interest rates, “Canadian consumers have been a steady source of economic growth, particularly through the housing sector.”
Despite the variability of the housing market, which saw real estate prices soar in 2016, consumers have shown no fear with respect to their spending habits. In fact, according to the Bank of Canada, household spending on big-ticket items in 2016 was strong. Combine this with one of the hottest summers on record—especially in Eastern Canada, which is arguably the industry’s largest market—pool installations were all the rage.
A sweltering summer
The weather experienced last year can easily be described by one word: hot. According to the Canadian Meteorological and Oceanographic Society (CMOS-SCMO), it was the fourth warmest in 70 years of record-keeping. British Columbia experienced its warmest year ever, while for the Prairies it was the second warmest. Those in Ontario and Quebec were not spared, as these regions endured the third warmest year ever.
What did this mean for the pool industry? Well, the installation season started on a good note as 161 more permits were issued in the first quarter alone, resulting in a 23.5 per cent increase over 2015. This trend continued as permit registrations increased in the second, third, and fourth quarters as well, representing an overall increase of 22 per cent, from 10,698 permits in 2015 to 13,054 in 2016. Of note, the number of permits issued between the second and third quarters in 2016 surpassed the total number of those issued in all of 2015. Permit registrations in census metropolitan areas (CMAs) increased by 25 per cent in 2016, representing a total of 1894 more registered permits than the year prior.
“For us, the first three quarters of 2016 were fairly typical in terms of custom concrete pool sales, exhibiting neither a major sales boom nor drought at any point. However, this all changed in the last quarter,” says BonaVista Pools’ vice-president, Peter Brown. “The number of new clients and established custom-home builders that started calling in late fall for pools, hot tubs, and water features increased exponentially. In speaking with other industry colleagues, they seemed to have experienced the same situation.”
To put things into perspective, the economy certainly plays a factor in the number of pools installed in any given year; however, the weather is just as significant. Consider this, an average of 9595 permits were issued in the ’90s, 9045 during the 2000s, and another 11,247 permits over the last seven years. In each of these decades a recession has occurred. One constant, however, has been warmer temperatures. In fact, 2016 was the 38th consecutive year with above-normal temperatures and the warmest year since observations began 135 years ago.
Therefore, in addition to disposable income, the weather plays a large role in how a family decides to spend their discretionary dollars and, for the most part, in 2016, many were interested in creating their own backyard destination.
When breaking up last season into three categories: start of year/early spring (January to April), mid-spring/late summer (May to August), and fall/winter (September to December), pool permit registrations were up considerably in each. The only month showing fewer permit registrations last year was December, which was down 23 per cent. That said, between March and August—the industry’s prime season—10,592 permits were issued, representing an 18 per cent increase. As the construction period has seemingly become longer for many builders, with many projects continuing late into the year, September, October, and even November have become a second season. Forty per cent more permits were issued during this period in 2016 than the year prior.