Americans will enjoy swimming in their backyard pools this summer, but they won't be spending a fortune on new ones.
Pool installations were part of the home improvement craze that swept the country during the pandemic as Americans were stuck at home. But recent signs show demand is slowing as households with more money to spend turn to vacations rather than renovations.
Pool Corp., a national pool equipment distributor with a market cap of about $11 billion, said last week that it expects new pool construction to fall 15% to 20% this year. Some local construction companies across the country are also seeing declines.
Skip Ast III, sales manager for Shasta Pools in the Phoenix metropolitan area, said the local industry has been having a tough time since about 2022.
“If 2023 was not already considered — in terms of the size of the complex — catastrophic, this year was worse,” he said, but added that the company had managed to adapt.
While consumers are not cutting back on overall standard spending, those with extra money in their budgets are increasingly spending it on experiences like travel, dining out and other service sector purchases.
Airlines and hotels are anticipating a strong travel season, cruise lines are seeing record bookings, and tickets to concerts and sporting events remain hot and at very high prices. By contrast, households’ nonessential purchases are cooling amid rising food costs and the Federal Reserve’s efforts to tame inflation by keeping interest rates high—which has long pushed up mortgage and credit-card rates.
The decline in big-ticket home purchases has been ongoing for months, and pools aren’t the only backyard feature facing slower demand; Traeger Grills reported a decline in revenue in the first quarter, part of a trend that began early in the post-pandemic recovery. But companies that rely on Americans’ appetite for home renovations are still adapting to tough times — including pool builders.
In 2020, installations of all types of pools, from in-ground and heated pools to inflatable models and above-ground pools that are typically cheaper, rose by 20%, according to real estate analytics firm Cape Analytics.
At that time, “people started to settle into the idea of, ‘Well, we’re going to be home for a while, and we need to move the holidays to our backyards,’” said Ast, whose family has been building pools for nearly 60 years. Suppliers were struggling to keep up with huge orders and contractors were facing months-long backlogs, he recalled.
Scott Payne, a pool installer in Hatfield, Pennsylvania, has also seen his business boom during the pandemic: “As a company, we doubled revenue in five of the first seven years. And two of those years were during COVID.” He described getting eight to 10 calls a day at peak demand.
But despite the recent nationwide declines, Payne and Ast said their businesses are doing well, even as they each raise prices due to rising material costs. Both said their work during the pandemic has helped lay the groundwork to weather the slowdown.
Payne said responding to increased demand in a wealthy area several years ago allowed his company to develop a “ubiquitous presence” there, which continues to generate revenue. While he has fewer projects underway today, he is taking on more expensive ones, allowing his company to maintain its high revenues.
“A lot of businesses have probably pulled back a little bit. I can't say we're not seeing this, but we're probably a little bit insulated from it. We're still very busy,” he said.
As demand slows, Shasta’s moves during the pandemic are also paying off, Ast said. It launched an online calculator to help potential customers estimate the costs of their projects, and it launched a new pool care division that offers post-installation maintenance services. All of these factors combined have allowed the company to capture a larger share of revenue from fewer consumers in the overall market, Ast said.
Even Pool Corp. pointed to a glimmer of hope in the slowdown: With many families recently building new pools or upgrading existing ones, there's a growing demand for maintenance services like the kind Shasta now offers.
“We are encouraged that sales of maintenance-related products remained stable, as evidenced by volume growth in chemicals, and equipment sales (excluding detergents) declined by only 2% during the year, an improvement over the 3% decline in the first quarter of 2024,” the company said in its earnings release.
And with climate change contributing to earlier, hotter and more frequent heat waves — like the one that swept across large parts of the country in mid-June — some consumers may start to see pools as more of a necessity than anything else.
In Arizona, Ast says, “the lines between luxury and need are somewhat blurred in the middle of the desert.”
