The Balance Sheet ▶What’s In: Price Increases What’s Out: Needless Spending

A slowing economy — and talk of a recession — was a major concern for pest management professionals who participated in the 2022 PCT-NPMA industry survey.

More than three quarters (77 percent) said the industry would be impacted in the next two years if customers cut back or eliminated service due to tighter budgets and money concerns.

Luke Lewis, president of Native Pest Management, which serves Southeast and Northwest Florida, was anticipating a downturn. “We haven’t seen it yet but based on everything that’s been in the news, I kind of expect it at this point for 2023,” he said.

Fuel costs were expected to have an impact, reported 74 percent of PMPs. “My bookkeeper very kindly pointed out to me that last year our fuel bill was half of what it is this year,” said Kurt Scherzinger, president of Scherzinger Termite & Pest Control, Cincinnati, Ohio, of his fuel outlay in 2022.

Factors like inflation (69 percent) and the labor shortage/hiring issues (53 percent) also had PMPs adjusting business practices.

“Inflation is basically raising the price of everything. It’s the fuel, the insurance, products, labor. We’re trying to pass along what we can to our clients. We’re definitely raising new client pricing regularly,” said Lewis, who now reviews prices quarterly to ensure he’s ahead of the game. It’s a balancing act, however. Prices only can be raised so high and so often before customers drop or pass on service.

In response to economic factors, most pest control companies (69 percent) planned to raise prices in the next six months. More than half (51 percent) planned to analyze data to improve processes and the customer experience, and 48 percent said they were trying to collect money faster from customers.

Like 47 percent of survey respondents, Scherzinger planned to drive service vehicles longer and extend their service life. “It’s very hard to get vehicles so then you’re having to repair vehicles instead of replacing them,” he said.

Rising interest rates, a concern for 29 percent of PMPs, caused some companies to pause expansion plans and delay big capital expenditures.

In early 2022, Lewis declined a Small Business Administration loan with a variable interest rate to expand his marketing and sales efforts after weighing the potential cost versus the benefit.

Higher interest rates on the company line of credit had Scherzinger rethinking purchases. He now takes “a hard look at what we need” instead of what employees want.

Despite economic challenges, most PMPs (76 percent) said they were very or somewhat optimistic about the future of their business or service location over the next two years.