Scottsdale, Ariz.—The 2023 Starnet Commercial Flooring Cooperative spring conference kicked off earlier this month amid robust member participation. In fact, it was the highest attendance ever for a non-anniversary year.
Preliminary registration figures obtained on day two of the conference put attendance at roughly 670 registrants. More importantly, according to Mark Bischoff, Starnet president and CEO, is the participation among member organizations. “We count the attendance by membership to make sure the member population is high,” he said. Membership total right now is 170 shareholders representing 398 locations. “At the same time, our vendor members partners also bring guests to participate in the various functions.”
Bischoff attributed the strong participation to the networking aspects of the event as well as the high-level programming. “We’ve done a better job of staying connected not only with the shareholders but also their associates deeper in their organizations,” he told Floor Covering News. “We continue to work hard to provide content that’s meaningful for folks who are actually running the business day to day both in the field and in the office that aren’t necessarily the shareholders, and we’ve been getting good feedback around that content. The continuation here on the ground at convention is to make sure that those people who are getting those benefits from our ongoing communications and training feel like they need to show up to get more of that in person. Owners like the associates to be more comfortable with Starnet and the concept.”
The value of establishing those connections, according to Bischoff, cannot be overstated. “By attending convention, these folks get to build connections across the country where they can phone a friend if they run into a project that’s challenging or call someone they met at conference to understand how they might solve a particular problem.”
That’s one of the reasons why DMA Floors, a Richmond, Va.-based commercial flooring contractor, joined the group. Specializing in epoxy and resinous floor coatings, concrete polishing, hardwood, ceramic tile, vinyl, rubber and carpet floor coverings, DMA has worked with general contractors, manufacturers, distributors, construction professionals, architects, designers and end users for the past 44 years.
“We are thrilled to join the Starnet network of commercial flooring contractors and strategic partners,” said Corey Smith, president of DMA Floors. “Our team will benefit from Starnet’s professional education and training opportunities to stay a step ahead of industry trends and enhance the service levels we deliver to our customers. We also look forward to further build and create new relationships with the network’s manufacturing and service partners.”
Attending convention also gives members the opportunity to benchmark their successes and measure business activity against contractors operating in other parts of the country. It’s an especially critical time given the current state of the economy, negotiations surrounding the U.S. debt ceiling and, of course, the upcoming 2024 presidential election.
“We’ve had some meetings early in the conference where we did a business update—anecdotally speaking,” Bischoff told Floor Covering News. “Many of our members are still concerned about the commercial office sector, which has been soft since 2020. Outside of large projects, tenant improvement work is almost non-existent. However, we’re finding that many have pivoted to the education sector—specifically K-12 and universities—and senior living, hospitality and retail, surprisingly. There are other segments that they’ve been able to service, and there is a lot of confidence in these other market segments.”
That’s certainly been the case for James Pennington, director of sales and project management for Jack Laurie Group, Indianapolis. “In our market we’re seeing a lot of projects in the education sector,” he said, citing demand for carpet and resilient flooring in particular in schools. “There’s heavy turnover work in classrooms that are doing a section at a time.”
Meanwhile, in the Denver market, other sectors are popping. “We’re getting a lot of work from the hospitality sector—hotels, entertainment, travel and leisure—as those segments rebound,” said Grant Barnes, a 30-year veteran with Acierno & Company, where he currently handles sales. In addition to that, the multi-family segment—which many consider part of commercial since it often involves bidding—is going “gangbusters in Denver.”
Commercial market outlook
The cautious optimism that many commercial flooring contractors are feeling aligns with some economic forecasts. In his presentation to Starnet attendees, Alan Beaulieu, president of ITR Economics, told attendees that they can expect to be busy throughout the course of the year, despite current headwinds. He cited, among other things, existing projects currently in the pipeline, a supply chain that is returning to normal, an improving non-residential construction forecast and, more importantly, the fact that many companies are financially sound. “Don’t believe all the negative things you’re hearing in the media,” he told attendees. “Non-residential construction will see 12.8% growth this year.”
At the same time, Beaulieu advised contractors that the U.S. economy is expected to face a recession in 2024. As a result, commercial market activity will likely slow. “Non-residential construction is expected to see minus 2% growth by the end of 2024,” he stated. “You’re going to find yourself not enjoying it, but remember that a lot of industries will be worse off.”
While the outlook for the office sector remains uncertain due to post-COVID-19 trends that increasingly point to a more distributed workforce, Beaulieu cited other commercial end-use segments that hold more promise. Among them: healthcare, senior-living facilities and education. Another positive sign, he said, is occupancy rates multi-family and retail are high—which bodes well for renovation work.
