2013 Termite Management Survey

Termite swarms clearly aren’t what they were in the early- to mid-2000s, nor are new-home construction or existing home sales. But many pest management professionals (PMPs) report a continued recovery in their termite business — buoyed by rebounding home-building and home-sale markets, and advancing termite management technologies and techniques.

In a survey conducted by PMP in January 2013, many of the 288 responding professionals report their termite-related revenues continue to climb, thanks to increased inspection, exclusion and control work, and improved project pricing.

For instance, 51% of responding PMPs reported 2012 termite management revenue in excess of $50,000, and 63% project their termite-related sales will surpass $50,000 this year.

Regarding average price for initial inspection and solution application, 43% report netting a rate of $900 or more. This compares favorably to the 40% of PMPs who last year averaged rates of $900 or more. More than one-quarter of PMPs now are charging more than $1,000 per initial termite inspection and treatment. Almost half of PMPs expect their average initial termite inspection/treatment to top $900 in 2013, with 16% of PMPs — a one-third increase over last year — projecting pricing to top $1,200 per job in 2013.

PMPs’ attribute their termite management revenues and margins rebound to, ranked in order of importance, the following:

1. The ongoing economic recovery;
2. A rise in existing-home sales;
3. Better job pricing;
4. Reduced callbacks;
5. Improved renewal rates;
6. A decline in some product costs as some solutions come
off-patent; and
7. Increased new construction.

Just one-third of PMPs reported termite swarms helped trigger 10% or more of their termite revenue in 2011; 42% of PMPs saluted swarms for generating 10% or more of their 2012 termite revenue. Nearly one-quarter of responding PMPs said termite swarms did not help them generate a single dollar in 2011; that percentage dropped by half for 2012.

The construction factor

According to a Bloomberg report, 2012 ushered in an estimated 780,000 new-home starts in the U.S. This represented:

■ a 28% climb from 608,800
new-home starts in 2011;
■ the most home starts since 2008; and
■ the biggest such annual gain since 1983.

The median estimate of 84 economists surveyed by Bloomberg calls for a 14% increase, to 890,000 housing starts this year. Projections ranged from 850,000 to 930,000 new homes.

According to government data, the number of existing homes (including single-family, townhouse and condominium units) sold rose 1.7% in 2011 and 9.2% in 2012. It’s projected to climb another 9.1% this year, and 5.9% in 2014.

The National Association of Realtors (NAR) reports existing-home sales rose by 390,000 units in 2012 — to 4.65 million homes, the highest level in five years. The annual average existing-home sale price rose more in 2012 than it had since 2005. The median existing-home sale price surged 6.3% to $176,000, from $166,100 in 2011.

The bottom line: Home building, home sales, and swarms haven’t completely disappeared — nor has related termite management revenue and innovation. With a rap sheet that includes causing an estimated $6 billion in damage annually to U.S. dwellings, these wood-destroying insects — and the identification, control and exclusion technologies, techniques and dollars tied to them — are here to stay.

You can reach Whitford at mwhitford@northcoastmedia.net or 216-706-3766.