Mechanical Hub continues with its 2023 Industry Forecast series with an exclusive interview with Caleffi North America’s president Mark Olson. Despite all of the negativity, Caleffi remains optimistic throughout all of the bumps in the road.
MH: I’ve heard that the first half of 2023 might be a bit bumpy, how do you see 2023 shaking out and the short-term economy in the U.S.?
OLSON: The economy is slowing; however, orders are expected to remain healthy through Q1 as building projects are completed. In Q2, we expect orders to slow to probably a little less than last year’s intake rate. A primary factor is the abrupt drop in single-family construction from the quick rise in mortgage rates. However, we anticipate continued investment in homeowner refurbishment will be offsetting—there is still healthy excess personal savings out there for people to invest in their homes. Another additional factor is wholesalers are reducing their DOS as the supply chain is catching up on availability.
In the commercial marketplace, we expect activity will remain strong throughout 2023. Building projects have alternate sources of financing not constrained by high interest rates. Residential multi-family will stay robust before slowing some around the middle of the year.
MH: What causes you concern? (Steady inflation, materials pricing, supply chain, housing starts, interest rates, foreign factors, etc.)
OLSON: We do not have much concern honestly, outside of a belligerent foreign act that triggers a deep recession. The supply chain is healing and we expect inflation will continue falling through the year.
MH: Are you seeing any signs of positivity? If so, where?
OLSON: Yes! A consensus among manufacturers is that the long-term outlook for the economy remains good. Future infrastructure spending by the government such as enhanced electrical distribution and port infrastructure investments are examples. Reshoring manufacturing back to the U.S. will drive employment opportunities with product demand to follow.
MH: Obviously, Caleffi is dependent on a global market as well. What are some indicators globally that are cause for concern and/or optimism?
OLSON: OPTIMISM wins! Our global rolling 2-month order intake rate exceeds 2022’s record pace. We are investing heavily in manufacturing expansion. Availability of energy in Europe is rapidly sorting out. In addition, the shift in Europe to electrification, accelerated by the Ukraine invasion, has created opportunities for new, innovative hydronic solutions. Caleffi is eager to meet this opportunity with energy savvy hydronic products.
MH: As it relates to contractors, what is your “message” to them as it relates to your company and its line of products and services?
OLSON: We pick up the phone! Engineers, wholesalers, reps, contractors, it does not matter! Our “Ask Caleffi” Technical support team, with over 150 combined years’ of experience in the industry, is available real-time to answer calls and emails. Caleffi wants to be a business partner of choice. Contractors can count on our level of experience, expertise and our commitment to Excellence in Education to help make their job easier!
MH: What specifically does Caleffi have its sights set on in 2023? (New products, working with associations, for workforce development, etc.)
OLSON: Caleffi is kicking off the year at AHR with the 536 Series PresCalTM HP which has been recognized by the Innovation Awards judges as the 2023 INNOVATIVE PLUMBING product winner! We’ll be exhibiting in our biggest Booth ever in Atlanta, where visitors can literally look inside of our quality products.
Spoiler alert: We will be soon launching a revolutionary union sealing technology with Posi-StopTM (stay tuned!).
We are increasing investment in the professional development of our staff.
Did we mention that we are GROWING? In fact, we are nearly tripling our inventory carrying capacity in Milwaukee during the next phase of our building expansion starting later this year.
Caleffi is proud to expand its industry engagements with the American Society for Health Care Engineering (ASHE), American Backflow Prevention Association (ABPA) and the Advanced Water Heating Initiative (AWHI).
MH: Any unique training opportunities for 2023?
OLSON: Watch for training opportunities facilitated by our Caleffi staff and Manufacturer’s Representatives in YOUR neighborhood, making it easy to connect and learn with in-person and LIVE virtual settings.
In 2020, the heart of the latest expansion in Milwaukee was the incorporation of unique work environments that can be transformed into large spaces for training and workshop events. Caleffi will be offering Academy sessions in 2023 designed especially with the engineer and contractor in mind. Stay tuned!
And… don’t worry! The industry can count on the continuation of Caleffi’s commitment to Excellence in Education including idronicsTM, a complimentary design journal for hydronic and plumbing pros, with its just released 32nd edition: Troubleshooting Hydronic Systems.
Coffee with CaleffiTM, a popular monthly webinar series that features our trainers and industry guest speakers, continues into its 14th year.
Our Ask Caleffi team hosts an engaging podcast series intended for contractors tasked with solving tricky system problems and are looking for answers!