January 2023

By Sal Gattone, PMI Board of Directors President, LIXIL

The novelist and essayist Scott Russell Sanders once said, “Conservation arises from the perennial human desire to dwell in harmony with our neighbors. We strive for a way of life that our descendants will look back on with gratitude, a way of life that is worthy of our magnificent planet.”

These couldn’t be truer words. During this time of climate change and uncertainty, we all need to acquire the role of a conservationist. We are well aware that many states facing severe droughts are at the brink of clean water crises. Modern life relies on the easy availability of water. We need it to drink safely at home, enjoy a hot shower, cook healthy food in our kitchens, water our gardens, and minimize the spread of infectious diseases through a simple act of handwashing. This access assures our health and safety and our very survival. Hence, we need to collectively respond to water crises and actively work together on sustainable solutions.

A major strategic initiative during 2023 will be Rethink Water. Plumbing Manufacturers International’s approach to the initiative’s first project – legacy product replacement – and future projects will be akin to putting together pieces to a puzzle. To illustrate this point, we put together a Rethink Water puzzle, shown in the photo, at the PMI22 Manufacturing Success Conference by having each attendee contribute a piece.

During 2023, each PMI member will be asked to contribute their piece towards making a robust private-public approach to legacy product replacement a reality. Another great way to contribute your puzzle piece is to become a part of the PMI volunteer leadership team. Being a volunteer leader provides great opportunities to expand your network, learn about the latest industry trends, and develop your leadership skills. I thank you for all you have done so far for the Rethink Water initiative and encourage you to bring your “puzzle pieces” to PMI discussions this year, so we can lay a strong foundation for bigger achievements for our industry.

In 2022, our society made great strides in overcoming the challenges of the pandemic, and in 2023, we hope to continue to make progress. I’m honored by the confidence you have placed in me to be the 2023 president of the PMI Board of Directors. As many of you know, over the past several years, I’ve served on the PMI board in a variety of roles with varying responsibilities. My industry experiences and my day job at LIXIL have provided me with valuable insights into sustainable business strategies and operational efficiencies. These learnings will guide my leadership responsibilities for PMI. I look forward to working with each one of you to ensure you see value in being a PMI member.

Further, on behalf of all PMI members, I’d like to give special thanks to the 2022 PMI board president, Martin Knieps. Martin is an inspiring leader and I have been honored to work with him. I join the other board members in looking forward to his continued support and guidance during this coming year.

Lastly, I would request you to mark your calendars for the PMI23 Manufacturing Success Conference and the 69th PMI Meeting of the Membership, to be held from Oct. 23-26, 2023, in beautiful Seattle, Washington. I look forward to seeing you at all of our upcoming meetings.

May all of you have a happy and healthy holiday season and a wonderful 2023!

By Kerry Stackpole, FASAE, CAE, PMI CEO/Executive Director

This past December, President Joe Biden invited leaders from across the African continent to Washington, D.C., for the U.S.-Africa Leader’s Summit and Business Forum. The president and a delegation of U.S. government officials participated in a panel on “The Future of African Trade and Investment Relations with the United States.” President William Ruto of Kenya, Prime Minister Aziz Akhannouch of Morocco, Chairman of the United Bank for Africa Tony Elumelu, Chairman and CEO of Visa Alfred Kelly, and African Continental Free Trade Area (AfCFTA) Secretary General Wamkele Mene were all in attendance.

Immediately following the panel discussion, U.S. Trade Representative Katherine Tai and Mene signed a memorandum of understanding to promote further collaboration between the U.S. and the AfCFTA Secretariat. The MOU signing was hailed by Tai for creating “a platform for a regular dialogue with the AfCFTA Secretariat and other stakeholders to address matters of mutual interest about the negotiation and implementation of the AfCFTA.”

Africa is the world’s second largest and second most populous continent after Asia. With a population exceeding 1.4 billion people, the Africa continent encompasses enormous human and natural resources. It’s also the recipient of more than $55 billion dollars in investment by the Chinese government, alongside some $126 billion in loans. Since 2010, a third of Africa’s power grid and infrastructure has been financed and constructed by Chinese state-owned companies. The Chinese economic engagement with Africa has interesting implications for U.S. foreign policy.

According to the Foreign Policy Research Institute, “Central to China’s foreign policy is the willingness to align and cooperate with other countries to build a multipolar international system that protects its interests in global politics. This is seen in coordinated policy positions and joint diplomacy in, for example, BRICS (Brazil, Russia, India, China and South Africa), BASIC (Brazil, South Africa, India and China), and the Shanghai Cooperation Organization.” This alignment illuminates a trend in misalignment between African nations and the U.S., especially in world organizations such as the United Nations. With that said, there are still enormous investment opportunities and unmet needs in Africa. There is plenty of room for other investors.

The landmark $1.2 trillion Infrastructure Investment and Jobs Act escalates American investments in its own infrastructure – better roads and bridges, public transit, airports, shipping ports, and power infrastructure. Interestingly, those are the same investments vital to Africa’s growth. With rapid urbanization, the African Development Bank says Africa will need to spend $130-$170 billion per year to meet their infrastructure needs. At the current pace, they’re about $100 billion short. Chinese President Xi Jinping pointed out that “inadequate infrastructure is believed to be the biggest bottleneck in Africa’s development.” Not surprisingly, Chinese investment is focused on building airports, highways and railroads to fix that problem.

America is not sitting on the sidelines. Since 2021, the U.S. government has helped close more than 800 two-way trade and investment deals across 47 African countries for a total estimated value of over $18 billion, and the U.S. private sector has closed investment deals in Africa valued at $8.6 billion. U.S. goods and services traded with Africa totaled $83.6 billion in 2021. At the December 2022 U.S.-Africa Business Forum, Biden announced over $15 billion in two-way trade and investment commitments, deals and partnerships that advance key priorities, including sustainable energy, health systems, agribusiness, digital connectivity, infrastructure and finance. Corporations making investment commitments in Africa include Microsoft, IBM, Visa, MasterCard, Motorola, GE Healthcare, Pfizer, Amazon Web Services, John Deere, Ford Motor Company, and Dow, among dozens of others. The level of investment and the potential for making real change appears to be coming into focus. Prosper Africa has a summary report of the commitments you can find at tinyurl.com/2hvc4u8c.

While China and India were the center of world trade through much of the 20th century, 25% of the world’s population will be in Africa by 2050, making that continent a serious world trade and labor force contender. Africans will constitute the largest population of prime working-aged women and men anywhere in the world. This rise in population will not be without its challenges, right alongside opportunities for innovation. With continued economic growth, modernization and improvements in public health, the African population will not only see life expectancy gains; they will also continue to drive international trade in ways unimagined today.

By Judy Wohlt, PMI Communications Team, Valek and Co.

Plumbing Manufacturers International’s government relations consultants provided updates on a large volume of federal and California legislation important to PMI and its members at the PMI22 Manufacturing Success Conference.

Federal priorities focus on drought relief, counterfeit goods, environmental justice and more

Stephanie Salmon, PMI’s federal legislative consultant, covered a wide range of legislative topics that affect plumbing manufacturers, such as funding for drought relief, deterring the sale of online counterfeit products, appropriating funds for plumbing research, and delivering environmental justice.

A broad climate package in the Inflation Reduction Act of 2022 supplied $4 billion of water-related provisions to the Bureau of Reclamation for drought relief programs. PMI signed an Alliance for Water Efficiency letter urging the bureau to prioritize proven water efficiency strategies when deciding how to spend the funds. The bill also earmarked $550 million for domestic water programs in disadvantaged communities and $12.5 million for emergency drought funding for tribal communities, she noted.

PMI continues to advocate in support of the INFORM Consumers Act (HR 5502/S 926) to deter online sales of stolen and counterfeit goods. This bipartisan legislation would ensure consumers can see basic identification and contact information for high-volume third-party sellers and require sellers to specify if they are a manufacturer, importer, retailer or reseller. The bill was included in the Senate FY23 Defense Bill in October 2022 but removed in December, Salmon said. Efforts continue to include the measure in the 2023 omnibus spending bill.

She thanked PMI members and others for supporting the National Institute of Standards and Technology Plumbing Research Act, which was included in the final CHIPS and Science Act signed into law in August 2022. The law enables NIST to conduct research on premise plumbing related to water safety, security, efficiency, sustainability and resilience. Ultimately, the research could support a comprehensive upgrade of U.S. plumbing structure, design and construction standards. PMI will continue urging Congress to appropriate the necessary funds to conduct NIST research in 2023, Salmon said.

Key Environmental Protection Agency priorities PMI will continue to track focus on climate change, resilient infrastructure and environmental justice (EJ). The Biden administration created a new EPA office dedicated to EJ and a White House EJ Advisory Council to address the disproportionate harm that pollution and climate change have caused in low-income areas and communities of color. EPA tools, including the Enforcement and Compliance History Online (ECHO) website at echo.epa.gov, allow the public to track which facilities in their communities comply with environmental regulations. Salmon encouraged PMI members to use ECHO to assess their company’s EJ results.

California drought spotlights need for water savings, inspires PMI study

Jerry Desmond, PMI’s California government affairs consultant, highlighted legislative activities in California that may cause the state to push for deeper water-saving measures as it continues to respond to drought conditions.

The California Energy Commission has opened a new docket (22-AAER-05) to consider possibly lowering water closet flow rates in the future, he noted.

PMI supports efforts that can achieve additional water savings as quickly as possible, particularly by increasing market penetration of water-efficient toilets and other plumbing products. Desmond discussed PMI’s recently commissioned “California Market Penetration of Water-Efficient Plumbing Products Study,” which supports directly replacing older, inefficient toilets and other plumbing products to save a high volume of water quickly.

The study revealed an opportunity to save 3.2 billion gallons of water in three to five years by replacing 469,000 3.5+ gallons per flush (gpf) toilets currently in use with water-efficient 1.28 gpf toilets. Statewide, up to 326 billion gallons of water can be saved over 30 years by replacing 26.1 million 1.6+ gpf toilets with 1.28 gpf toilets.

Desmond noted California AB 1867, a bill recently enacted that requires schools seeking state funding to make repairs or alterations to school buildings to include faucet aerators and water-conserving plumbing fixtures in all bathrooms.

PMI members can view Salmon’s and Desmond’s presentation slides here: tinyurl.com/c29exanw.

By Judy Wohlt, PMI Communications Team, Valek and Co.

Business and social disruptions are inevitable. But with good data and the right mindset – including a healthy curiosity for new points of view – plumbing manufacturers and other companies can learn how to turn disruptions into opportunities.

In his presentation at the PMI22 Manufacturing Success Conference, Tim Costello, chairman and CEO of Builder Homesite, Inc., shared insights on how the housing and construction industry, which he noted is slow to change, can learn to enjoy surfing the waves of disruption.

“By embracing technology and generational needs and analyzing worldwide demographics and societal changes, you can find these waves as exciting openings that can take your businesses into new areas,” he said.

Costello described disruptions as waves on a lake – with one disruption causing a small wave and multiple disruptions churning up “super waves.” The plumbing and construction industries were hit with a super wave during the pandemic – Zoom meetings became the norm, supply chain issues cropped up, materials became more expensive, and companies needed more skilled workers, he explained.

Tracking technologies that impact construction

Costello tracks more than 50 technologies that impact the housing and construction markets to help determine how they’re going to change the construction process. He reviewed the “dirty dozen disruptions,” including digital-first adoption, demographics and generational behavior.

Digital-first adoption encourages digital-friendly strategies that tailor technology to serve the needs of customers and employees. The pandemic profoundly affected how people use technology for commerce, work and virtually everything else in their lives, he noted. Costello cited the explosion of remote working, online purchasing – including home buying – and online entertainment that ramped up quickly during the first several months of the pandemic. He described Gen Z, which grew up using technology, as “mobile natives” driving the digital trend to use social media as a retail channel.

For example, he said 63% of homebuyers purchased a home online, sight unseen, in 2020. “Businesses resisting this type of societal change will become stagnant and obsolete,” Costello added.

Digital sales trends in home buying and construction affect plumbing manufacturers. As a result, plumbing and construction businesses should be using technology to prepare their marketing strategies and decide how to best manage inventory, Costello said.

He asked, “What digital collateral do you have? What do you have that’s TikTok or Instagram-worthy? What social media influencers do you have? If we’re not thinking about those strategies, then we’re not dealing with the reality of the modern world.”

Be curious, create open networks and mine good data

Costello advised attendees to be curious and create open networks by seeking information from people with different perspectives.

“If you’re a home builder, you should be talking to single female buyers, single mothers, and same-sex couples because that’s who the market is and we need to understand their needs,” he said.

Tracking demographic shifts and generational expectations, which fuel the economy and the need for housing, can help plumbing manufacturers expand their businesses to anticipate the future needs of customers. He advised using artificial intelligence and machine learning to paint a full picture. “If you want to understand what’s going on, lean into the data upfront to study what’s driving the actual demand in the marketplace,” he said.

Using math models and machine-learning algorithms, construction and related industries can tie all population and housing data together to estimate future housing volume needed a decade or more from now, Costello said. He plugged in current U.S. census and demographic data to track the housing needs of Baby Boomers, Millennials and Gen Xers.

For example, Costello focused on Baby Boomers, who have been buying larger trade-up homes and second homes for several years. In 10 years, Boomers will no longer need those homes and, instead, will be looking to downsize and age in place or move to retirement communities and nursing homes, he predicted.

He called out Italy as an example of a country that didn’t study housing trend data against a shrinking population. “Why do you think you can buy a home for $1 in Italy? Because they passed their peak housing a decade ago,” he stated.

PMI members can view Costello’s PMI22 presentation slides at tinyurl.com/c29exanw.

By Judy Wohlt, PMI Communications Team, Valek and Co.

An economic re-set in 2023 will ease supply chain disruptions and reduce record-high materials prices in the United States. This forecast spells good news for plumbing manufacturers and others that have supported the huge home-remodeling boom over the past two years.

“Every other day you’ve been putting out fires. Demand is going to slow and 2023 is going to look and feel different,” Connor Lokar, speaker and senior forecaster with ITR Economics, told attendees of the PMI22 Manufacturing Success Conference. “We have to rebalance and allow the supply side of the economy to catch back up to the front-running demand from the last 18 months.”

Lokar pointed to leading economic indicators – including lower single-family housing starts, slowing retail sales and inflation – that he said will decelerate growth and cause a “soft landing” in 2023. Spending on home remodeling will return to normal pre-pandemic levels as Americans’ stimulus-driven spending comes to an end, he added.

Stimulus payments the federal government delivered to Americans in 2020 and 2021 boosted disposable income levels, causing unprecedented demand for plumbing fixtures, appliances, homes and more, Lokar said. In 2022, Americans began easing spending as their savings began to fall, he stated.

Slowing growth with some bright spots

The bright side to slowing global economic growth means fewer supply chain challenges and lower materials and component pricing. ITR projects that product and supply availability, as well as lead times, will improve in the second half of 2023.

Materials prices are coming back down to normal, particularly stainless steel and copper. Lokar predicted these prices will fall 19.8% and 18.8% respectively between 2021 – when unprecedented demand kept prices high – and 2023.

The plumbing and HVAC industries have been experiencing record employment; however, labor shortages will continue to be an issue for plumbing and related industries, according to Lokar. Entering 2023, about 859,000 manufacturing jobs remain open, he noted.

Housing market shifts with boosted commercial activity

Lokar described the housing market as “diverging ships” as residential construction began slowing at the end of 2022 and commercial building began ramping up. However, plumbing manufacturers did well commercially over the past two years. Touchless and other high-tech faucet sales rose, driven mainly by hand-washing recommendations from the Centers for Disease Control and Prevention to help prevent COVID-19.

Non-residential construction has been recovering with a growth cycle expected to continue throughout 2023 that will benefit plumbing manufacturers, Lokar said.

A housing recession that began at the end of 2022 will continue into 2024 because of combined mortgage and home price pressure on buyers, Lokar noted.

Homebuilders are losing confidence because of high land prices and less demand; as a result, they’re building fewer new homes. Single-unit housing starts began dropping at the end of 2022 and are expected to decline by about 4% by 2024, Lokar stated. Housing building permits are down across the U.S., particularly in the mountain states, the Plains and the Northeast. Lokar said that declining existing home sales into 2023 will likely rebalance remodeling activity to a more normal level.

PMI members can view Lokar’s PMI22 presentation slides here: tinyurl.com/c29exanw.

PMI members can get additional economic outlook information from the quarterly PMI Market Outlook Reports (safeplumbing.org/members/pmi-market-outlook-reports) created by ITR Economics.

By Judy Wohlt, PMI Communications Team, Valek and Co.

The Environmental Protection Agency (EPA) recently published extensive new guidance that applies to product surfaces designed to kill or mitigate microorganisms.

A recent Plumbing Manufacturers International webinar walked participants through steps to help comply with the new EPA requirements and minimize the risk of an enforcement action.

The guidance impacts companies, including plumbing manufacturers, making claims that their products can mitigate or kill microorganisms. It addresses antimicrobial residual claims for three types of products: disinfectant sprays, coatings and films applied to surfaces that are effective for weeks, and fixed surfaces – such as solids and paints, explained webinar leader Thomas Brugato, of counsel in the Covington & Burling’s Washington, D.C., office.

New testing methods, limited to copper, will analyze companies’ antimicrobial products for durability and effectiveness but can be “modified for other metals or solid impregnated surfaces or paints upon consultation with EPA,” Brugato noted. The EPA requires testing for two bacteria – Staphylococcus aureus and Pseudomonas aeruginosa – and for any additional bacteria or viruses that a company claims its product mitigates or kills, he added.

He reviewed the two types of claims companies can make: that a product either “kills 99.9% of [insert microorganism/s] within one to two hours of exposure when used as part of a comprehensive infection control program/protocol” or “continuously reduces [insert microorganism/s] within one to two hours of exposure when used as part of a comprehensive infection control program.”

Companies must register any products labeled and marketed with these claims with the EPA, Brugato said. Claim reviews can take substantial time. Some products, depending on their makeup, may be subject to a five- or nine-month review. Unless registering a copper surface, companies will likely need pre-submission meetings with the EPA to discuss specific product details and any modifications made to their test methods, Brugato said.

To protect consumers, the EPA requires companies to provide a “stewardship plan” when registering products labeled as antibacterial, Brugato stated. Plan requirements can include outreach to product users, a website for the product, and post-registration meetings with the EPA. If a company violates any of the conditions outlined in its plan, the EPA can suspend and de-register the company’s product.

Copper, used in many plumbing fixtures and products, was the main surface registered before the EPA’s new guidance was issued, Brugato noted. PMI members may find useful the EPA’s stewardship website to register products made from copper alloys (copperalloystewardship.com).

The EPA’s new “Guidance for Products Adding Residual Efficacy Claims” can be found at tinyurl.com/5n7fces9.

PMI members can view Brugato’s presentation and materials here: safeplumbing.org/members/webinars-videos.

This article is not intended as legal advice. Companies should seek legal counsel specific to their needs and situation.

By Ray Valek, PMI Communications Team, Valek and Co.

The Plumbing Manufacturers International Aspiring Leaders Program gave participants an opportunity to break the ice with fellow PMI members in a small-group setting while learning practical team-building techniques to use on the job.

Wendy Johnson of Kohler Co. and Kelly Mix of Water Pik, Inc., spoke of their experience at this annual event, held in 2022 at the Muhammad Ali Center in Louisville during the PMI22 Manufacturing Success Conference. The program focused on the three Cs of high-performing teams – conscious leadership, collaboration and celebration.

Speaking as a professional not currently in a management role, Mix said participating in the program was “a step outside my comfort zone. But at a high level, it was valuable as a means of meeting people in a smaller format prior to the larger conference.” Having provided her with tools to support her day-to-day work, Mix said she expects her participation will help her be a better contributor to her team.

Mix had attended one PMI conference before, but Johnson said the 2022 meeting was her first one, having joined Kohler earlier in 2022. “Because I was new to PMI, I enjoyed the bonding. It gave me a chance to get to know some of the people across the industry,” stated Johnson, who works in product compliance.

The group had the opportunity to explore collaborative methods – something that Mix said she found particularly applicable to her job. In her position as a product compliance specialist for showerheads, Mix said she often finds herself sharing perspectives, ideas and approaches with others.

Having the program suggested to her by Kohler co-worker and PMI Board of Directors secretary/treasurer Cambria McLeod, Johnson said the information participants received was very timely, appropriate and useful not only for an individual contributor, but also a manager. “There was something for everybody to take to be an effective leader. And you don’t have to be a manager to be a leader.” Whether you have direct reports or not, “the principles (of leadership) are still the same,” Johnson stated.

Johnson added positive feedback about the program’s Muhammad Ali Center location and the facilitator, Lisa Zangari. “(The location) gave it a relaxed feel because you were able to go ahead and look at some of the museum’s exhibits rather than having it in a hotel conference room.” She said Zangari had “an awesome delivery. She was very engaging and made it a very good, very pleasant workshop.”

The program began in 2019 at the Dali Museum in St. Petersburg, Florida. A virtual program was conducted in 2020 during the pandemic and resumed as an in-person event in 2021 at the USS Midway Museum in San Diego before the most recent 2022 event at the Ali Center. In addition, each year PMI hosts several virtual Aspiring Leaders Workshops open to all employees of PMI member companies.

PMI Director of Programs and Administration Jodi Stuhrberg said each year’s program is tailored to be unique and inspire those who attend. “We strive to create a truly one-of-a-kind learning experience. The program is attended by those newer to the industry, as well as those more seasoned who are looking to hone their leadership skills. It is wonderful to see participants bond through the course of the day.”

The next PMI Aspiring Leaders Program will be held on Oct. 23, 2023, in Seattle at a location to be announced in the spring, as part of the Oct. 23-26 PMI23 meeting. Mark your calendars and stay tuned for announcements about 2023 workshops and the October program!

By Judy Wohlt, PMI Communications Team, Valek and Co.

Veronica Blette, WaterSense program chief with the Environmental Protection Agency (EPA), provided an update on WaterSense award winners, potential faucet specification revisions, consumer research, and more at the PMI22 Manufacturing Success Conference.

Blette congratulated PMI members Kohler Co. and Sloan for winning 2022 WaterSense awards. Kohler earned its eighth WaterSense Sustained Excellence Award for creating innovative water-efficient plumbing products and promoting water conservation. Sloan won a WaterSense Excellence Award for promoting WaterSense products in the marketplace.

The EPA plans to release a Notice of Intent (NOI) for faucets specification revision in early 2023. A potential revision is being driven by several states, including California, that now require lavatory faucets to maintain a flow rate of 1.2 gallons per minute (gpm) or less, which falls below the current WaterSense level of 1.5 gpm for faucets. The NOI will involve possibly expanding the scope to include kitchen and public lavatory faucets.

The EPA encourages stakeholders, including PMI members, to provide feedback on the proposed scope expansion, performance and efficiency criteria. Blette noted that the EPA will work with plumbing manufacturers on a transition timeline and process if the specification revision takes effect.

With leak detection and water monitoring systems becoming more widely used, the EPA will likely issue an NOI for those systems in 2023, too, she said.

In response to the public’s call for more sustainable products, Amazon has made a climate pledge and has begun listing WaterSense plumbing products with the “Climate Pledge Friendly” label. Shoppers can see the special label while searching for products on Amazon and on an eligible product’s page, according to Amazon’s website.

New EPA consumer research on WaterSense purchasing behavior has revealed some helpful insights. Most notably, people are more likely to buy a WaterSense product over another product if they learn about WaterSense during the purchasing process, Blette said. And once people buy a WaterSense product, they’re likely to buy another, she added.

“We also found that shoppers would like a guide to use during the purchasing process and they want clear labels that are easily seen on WaterSense products to let them know the product’s good for the planet,” she stated. The EPA will likely update WaterSense communications to help build consumer awareness in the next couple of years, Blette added.

PMI members can view Blette’s PMI22 presentation slides here: tinyurl.com/c29exanw.