< Previous10 FEBRUARY 2020HIGH-PERFORMANCE HVAC TODAYYour maintenance technician now has a month’s worth of static pres-sure measurements under their belt and you’ve asked them to help an ap-prentice technician who is coming on-board. This is the best part of coach-ing – seeing someone take what you’ve taught them and then help others. This is called sowing the seeds.Sowing lets you multiply the results of the work you put in during steps one through four. Remember, it takes nur-turing, time, patience, and consistency for seeds to grow once they are sown.ONE STEP AT A TIMEIs it easy to define your WHY or per-form all the coaching steps we cov-ered? No. If it was, everyone would do it. It takes disciplined commitment to MANAGEMENTput what you know into practice. As-sess your team and put a plan togeth-er. Give the process time and don’t try to do everything at once. Change takes time, so set realistic goals and deadlines.Identify skills you want to coach and then put a game plan in place to teach them. It’s a good idea to have assistant coaches to help in ar-eas where you’re not as strong. Good coaches are coachable, but not per-fect. Let team members know you’re still learning too. They’ll appreci-ate your honesty and willingness to move the company forward. Each team member will know their coach cares about them and has their best interest at heart. They will walk through a brick wall for them. Be the kind of coach your entire team needs, and you deserve. FEBRUARY 2020 11HVACTODAY.COMAt the outset of the new year, the U.S. economy is slowing down. The slowing growth trend has been underway since the second half of 2018 and is consis-tent with our forecast and what our leading indi-cators have been calling for quite some time. Our analysis indicates that we are on track for further deceleration, well into the first half of this year. However, we anticipate that the economy will find firmer footing and accelerate during the sec-ond half of 2020, avoiding an outright recession. In fact, the U.S. housing market – currently emit-ting a bullish signal – is one of the leading indi-cators that excites us the most. Anyone operating in the residential HVAC marketplace should look forward to a rebound year for the housing indus-try, which struggled in 2019. OFF TO THE RACES As we wade into the early stages of the new year, residential building activity is gaining steam. This is a welcome shift in the industry af-ter rising mortgage rates, tight inventory levels, and headwinds to builder confidence delivered a lackluster 2019. Annual U.S. Single-Unit Housing Starts spent the majority of 2019 below the respective 2018 level, and contractors who install equip-ment into new construction likely took notice. However, housing starts transitioned to re-covery in late 2019, setting the stage for a 2020 bounce-back. Starts during the most recent three months totaled 224.2 thousand units, up 7.6% from the same period in late 2018. This marks the fastest quarterly growth rate since mid-2018. A pullback in mortgage rates is playing a key role in 2020’s reversal of fortune for the hous-ing market. Mortgage rates were in a rising pat-tern for most of 2017 and 2018, with average 30-Year Mortgage Rates topping out at 4.87% in November 2018. Buyers’ recoil from the rising in-terest expense contributed to 2019’s down year. Even so, 2019’s decelerating economy came with a silver lining: it coincided with declining interest rates. Thirty-Year Mortgage Rates retreated all the way back to averaging a low 3.61% in September 2019 before rising mildly in recent months. Buyers are responding to the decline of more than 100 basis points; this translates to rising builder confidence, rapid acceleration in Hous-ing Permit Issuances, and rising New and Existing Home Sales. Any contractors serving the new or replacement market should be opti-mistic about their growth prospects in 2020. THE ECONOMIC TRAINAt ITR Economics, we use the U.S. housing market as a leading indicator. In other words, we look at the trend lines in the industry as a preview of where the overall U.S. economy is going. As I explained last month in my 2020 Commer-cial Market Forecast (ncilink.com/2020Com-FCast), I often compare the overall U.S. econo-my to a train, with each of the economy’s various sectors serving as different cars. This illustrates how different sectors experience economic shifts and headwinds at different times. Some sectors are closer to the front of the train, hitting the bends, slopes, and tunnels first, while others are toward the caboose, blissfully unaware of the shifts occurring toward the front. The metaphor is especially apt when we exam-ine the U.S. construction space. The residential market is nestled close to the locomotive. It is of-ten the first sector into the turbulence of an eco-nomic storm but also one of the first out. We see and Resurgent Residential HVAC MarketBy Connor LokarMANAGEMENT2020: A ReboundingCONTRACTORS IN THE RESIDENTIAL HVAC SPACE NEED TO ATTACK 2020 WITH OPTIMISM AND AN AGGRESSIVE STRATEGIC PLAN. 12 FEBRUARY 2020HIGH-PERFORMANCE HVAC TODAYMANAGEMENTtioning contractors; and other building equipment contractors, averaged an all-time high of 2.26 million individu-als during the most recent 12 months. Hiring is showing tentative signs of slowing, but Employment is still up 4.0% from the same period a year ago. Expect overall hiring to slow nation-ally into 2020, but the trend will stop well short of the rising unemployment typically observed during macroeco-nomic downturns. This is not that kind of cycle. HVAC contrac-tors should leverage the slower hiring in 2020 to pick up additional talent. Contractors in the residential HVAC space need to attack 2020 with opti-mism and an aggressive strategic plan. Yes, the overall economy will be slowing through the early stages of 2020, and the noise emanating from the media sur-rounding the election will be deafening. Remember that your market – the U.S. housing industry – is a leading sec-tor and already taking flight as we ad-vance through the first quarter of 2020. Identify where your bottlenecks were during the last business cycle peak in 2018 and where they may again become an issue as things accelerate during 2020. Take steps to improve them. You do not have to wait until things get busier. Don’t react to the business cycle; think ahead of it. of one party or the other. From 1976 to the present, the av-erage GDP rate-of-change during Re-publican administrations was 2.81%; for Democratic administrations, the average was 2.85%. All of this leads us to the point we strive to make in our presentations and conversations: its policies and what ultimately becomes law or rule or executive order that can (at times) matter, not the party. At ITR we will keep an eye on any proposed policies that gain ground as the election cycle heats up and pro-vide commentary on whatever busi-ness implication they may have. Your job is to keep your head above the po-litical noise this year and focus on run-ning the business. FINDING AND KEEPING GOOD PEOPLEDespite the macroeconomic slow-down underway, finding and keeping talent will remain an issue. U.S. Em-ployment of Building Equipment Contractors, which includes elec-trical and wiring installation contrac-tors; plumbing, heating, and air condi-its shifts through the business cycle as a likely path for the overall economy as measured by GDP. We saw this play out during the last year, as the U.S. new housing market was faltering in late 2018 while the overall economy was still near its busi-ness cycle peak. The housing market continued to slow and eventually con-tracted at points during 2019, and the U.S. economy followed just behind, posting diminishing growth rates as the year went on. Now, we see encouraging signals that the U.S. new housing market is rounding the corner in early 2020, in front of the improvement in the over-all economy that we anticipate during the second half of the year. POLICY VERSUS POLITICS: WHAT MATTERS?Complicating everything, we have officially entered a presidential elec-tion year. That and the fact that the U.S. economy is slowing down make for two converging trends likely to yield grotesquely irresponsible eco-nomic reporting and high uncertainty over the next year. At ITR Economics, we do not favor either political party when it comes to our economic analysis. Policy can mat-ter, but history has shown that whichev-er party is in the White House does not. The chart illustrates one of the rea-sons why. The quarterly growth rate for the U.S. GDP (adjusted for inflation) is presented. The blue dots mark the end of the first year of a Democrat’s term in the Oval Office; the red dots depict the same for a Republican. From our per-spective, it is not possible to statistical-ly demonstrate that superior growth, or the lack thereof, can be laid at the feet Connor Lokar is a Program Economist at ITR Economics, a 72-year-old economic research and consulting firm. Lokar specializes in the construction industry and provides economic consulting services for businesses, HVAC trade associations, and Fortune 500 companies. He is a graduate of the economics department at the University of Michigan. His economic insight and forecasting experience play a key role in ITR Economics’ 94.7% forecast accuracy. To learn more about ITR Economics, visit www.itreconomics.com. Follow Lokar on LinkedIn (ncilink.com/ConnorLokar).If You Don’t Measure, You’re Just Guessing!™APRIL 5-9, 2020 • SCOTTSDALE, AZ17TH ANNUALCoach Your Team to Coach Your Team to High PerformanceHigh PerformancePerformance-Based Contractors from across North America will converge in Scottsdale, Arizona to learn, share, build relationships and explore new opportunities, products and services. This is the only event of its kind completely focused on High-Performance HVAC.Summit is open to all HVAC professionals. It’s become the gathering place for like-minded people to learn from and share knowledge with fellow High-Performance professionals.Coach Your Team To SuccessThis year the conference focuses on coaching your entire team to High Performance. From the opening session through every workshop, you will learn how to coach your team members on specific topics that will help bring your team together as you integrate performance into your company. And You Won’t Miss A Beat!Summit’s unique format is designed to make sure you are able to take in every single session without missing anything. ABC: ALWAYS BE COACHINGRegister today at GoToSummit.com or call 800.633.7058WELCOME RECEPTION: Be sure to attend this gala event where old relationships are renewed and new relationships are formed. The Welcome Reception is sure to be a valuable networking event with fantastic food and beverages, great music, and a lot of fun! — Sponsored by Goodman Mfg.SUMMIT ORIENTATION & NEW MEMBER MEETING: Whether your an NCI Member or not, this brief overview will be a helpful introduction to NCI, the Summit conference, and our membership program.OPENING SESSION with NCI’s exclusive Reach For The Summit Gameshow – Coaching Edition. This fun and educational event includes audience participa-tion in a fast-moving quiz show where two contestants compete for the win and some great prizes.IDEA MEETING: All contractor attendees are invited to this 2-part event where each participant can propose one or more ideas in the areas of lead generation and sales. Don’t forget to bring your ideas and $20 entrance fee. The best ideas split the pot for great cash prizes!NCI PARTNERS RECEPTION AND TRADESHOW: Our Partners help make this conference possible. Show your appreciation by attending the trade show events. Who knows? You might find that next great product or idea!KEYNOTE SPEAKER: This year’s keynote speaker, Ryan Kohler of Hire Dimensions, will focus on a subject that is near and dear to us all: Attracting and keeping good employees. This is more important than ever as our industry’s aging workforce is dwindling and it’s becoming harder than ever to attract enough new talent to our industry.AWARDS BANQUET: This long-standing tradition is one of the highlights of every Summit. Join us in honoring the best of the best Performance-Based HVAC contractors. You might just be one of them!Special Events1. Coaching Your Entire Team What is High-Performance Contracting™ and why are we doing it? Workshop Leader: David Richardson, National Comfort InstituteLearn how to coach your entire team on your mission and vision as it relates to becoming a different kind of company – one who uses data from performance testing to deliver the best possible products and services to your customers. This coaching should be your first step to get your entire team on the same page. The session will cover:• What is Performance and how does it impact our customer? • How do we measure Performance? • What do we do with the data we collect?• Why delivering High-Performing systems is important to our company.2. Coaching Your Managers How we will implement high performance into our business Workshop Leader: Dave DeRose, Masterworks Mechanical Once you’ve got everyone on your team introduced and “on board”, it’s time to get a little further into the details of implementing the High-Performance approach company-wide. This coaching session is designed to help you coach your management team on some of the subtle, and not-so-subtle changes you will be making to integrate higher performance into your organization. The session will cover:• How we plan to integrate the performance-based approach into our company• What we will do differently in the office and shop• What our managers will do differently: Service, Sales, and Installation• Why we need to “Always Be Coaching”3. Coaching Your Technical Team How we will integrate performance into service and install Workshop Leader: Casey Contreras National Comfort InstituteNow it’s time to drill down with both your Service and Installation teams on how you plan to integrate High-Performance in their daily work in the field. This workshop covers how you will communicate the training, tools, and support you plan to give them to help them make the transition. High-Performance starts with testing on service and maintenance calls, talking to customers about findings, and recommending next steps. Once a project is sold, your installation team also needs to understand what is expected of them, and what they will be doing differently. The session will cover:• What our service and maintenance techs will do to identify opportunities• How will we educate customers about their HVAC systems• What we will do differently on our installations, includ-ing testing out• What will change with our refrigerant-side testingBreakout Sessions4. Coaching Your Sales Team How we will integrate the High-Performance sales approach with our businessWorkshop Leader: David Holt, National Comfort InstituteAs your technical team gets on the same page, it’s important to work with both your inside and outside sales team on the specifics of adding air upgrades and renovations to their equipment replacement proposals, as well as selling stand-alone renovations. It’s also important that they understand when they should be able to price the work themselves, and when to bring in higher technical expertise. The session will cover:• How we plan to sell it – High-Performance Sales versus High-Pressure Sales• How we plan to market performance and identify opportunities for system upgrades and renovations.• How we will price Air Upgrades and more comprehensive renovations• How we plan to communicate and hand-off jobs to installation5. Special Hands-on WorkshopHigh-Performance Town 2020: Hands-on testing and diagnostics labs Your Instructors: Rob Falke, Jeff Sturgeon, and Justin BrightNCI’s High-Performance Town returns to Summit! In this breakout session, you’ll participate in three hands-on labs where you will experience advanced tests and calcula-tions to diagnose and offer highly profitable system upgrades, just as your teams do in the field. You will receive new detailed NCI procedures and quick reports to integrate into your leadership team’s coaching following Summit.Hands-on labs will increase your ability to lead and coach your company as you experience first-hand the success of field testing and diagnostics. • Estimate and measure a single room’s airflow, with your customer’s participation, in less than 3 minutes during a sales call• Use NCI’s FREE Air Maxx Lite™ App to test and diagnose system static pressure and engage customers when selling, servicing or installing HVAC systems• Measure, calculate, and repair duct temperature losses through attics and help customers see the immediate impact on their comfort and utility billsPre-Conference Events/TrainingPre-Summit Golf OutingSUNDAY, APRIL 5NCI’s Summit 2020 Golf Tournament – Join our members for some sun and fun on the award-winning Saguaro course at the We-Ko-Pa Golf Club in Scottsdale, AZ. This will be a Foursome Scramble – we will pair up golfers if not on a 4-person team. Lunch is included with our Awards luncheon at the clubhouse.Club rentals are available. Please call 480-836-9000 to reserve rental clubs early before they run out.Bonus: Members can apply NCI Bucks to the outing!Increase Closing Rates and Profits with Perfect Pitch – This all-day training program is perfect for HVAC Professionals already using Goodman’s Perfect Pitch sales process and software, as well as High-Performance Contractors who want to make block load calculations a part of their sales process. — Sponsored by Goodman Mfg.Step Up to High-Performance HVAC! – Learn how to take your company to the next level of service and performance in this full day workshop focused on the key elements of delivered performance. — Sponsored by R.E. MichelWomen in HVACR Western Regional Meeting – Both men and women are invited to participate in this great event which will feature engaging topics and speak-ers focused on women’s contributions and impact on the development and growth of our industry.Nothing But Air! Advanced Airflow Diagnostics Recertification Class – This intensive hands-on day of training features advanced air diagnostics reports and procedures from NCI’s extensive library coupled with the best of our new simple diagnostic tips. Refrigerant-Side Performance Class with Certification – What if everything you thought you knew about diagnosing and solving refrigeration-side performance problems may not be totally correct? Learn about the better way to solve comfort issues in this 2-day course (Day 2 is Thursday, April 9th). Qualifies for recertification.MONDAY, APRIL 6We-Ko-Pa Resort & Conference Center10438 North Fort McDowell Road, Scottsdale/Fountain Hills, AZ 852641(480)789-5300To receive our special group rate of $159/night go to http://ncilink.com/Summit2020HotelPost-Conference TrainingTake Your Combustion Diagnostics Skills to the Next Level:Advanced Carbon Monoxide & Combustion Recertification – NCI’s Combustion Performance and Carbon Monoxide Safety Certification class is well-known throughout the HVAC world. Certified CO/Combustion Analysts can take this special advanced post-conference training to renew their certification. Prerequisite: NCI CO/Combustion Analyst CertificationRefrigerant-Side Performance Class with Certification (Day Two) – Day One is April 6th This National Comfort Institute two-day advanced certification class provides you with real-world lessons and hands-on training. It’s based on proven techniques on how to best approach refrigeration-side issues. Qualifies for recertification.THURSDAY, APRIL 9We-Ko-Pa Resort & Conference CenterSummit 2020 will be held at the We-Ko-Pa Resort located 20 minutes from the Phoenix International Airport. Discover the beauty, tranquility, and culture of Arizona’s captivating Sonoran Desert at the AAA Four Diamond We-Ko-Pa Resort & Conference Center!The We-Ko-Pa offers a lushly landscaped oasis with spectacular views of Arizona’s majestic Four Peaks and iconic Red Mountains alongside the free-flowing Verde River. The perfect resort for both work and play, the property is managed by and maintains close cultural ties to the Fort McDowell Yavapai Nation. In this native language, the name “We-Ko-Pa” means “Four Peaks” and allows us to honor these regal lands while paying tribute to the diverse and vibrant heritage of the Yavapai Tribe.Reserve your room now to get the best rate.Event & LodgingStep up to the plate and help your players find their "Sweet Spot!"Reserve Your Seat Today! Visit GoToSummit.com to register, or call 800-633-7058Next >