Each year, I’m asked what I see happening in the next 12 months. Well, here we are at the end of 2012, and to say the least, it’s been interesting. Now we are looking at 2013 and what it may hold for the VACR industry. And as you know, to really be able to make any kind of predictions about the future, you must look at the immediate past.

R-22 Sticker Shock

2012 started off with a bang in the industry. When the Environmental Protection Agency failed to set the production and import allocation levels for R-22 for the year, prices skyrocketed. Contractors reported to ACCA that prices doubled, tripled and in some cases quadrupled overnight. And since the EPA has still not set the 2012 allotments, we can be sure to see continued uncertainty over the price and availability for R-22 in 2013.

Gridlock on Capitol Hill

It’s no surprise to hear that Congress didn’t do much in 2012; after all, it was a major election year. With many lawmakers on the campaign trail, including the President, everyone was trying to “play it safe.”

Congress defined itself this year by political gridlock and what seemed to be unwillingness to discuss significant and looming issues facing the country until the lame duck session. They did extend the Bush tax cuts through the end of 2012 but failed to reach an agreement on what should be done about the deficit spending. The extension of tax incentives and spending cuts are two important issues again coming to a head on Capitol Hill as the end of 2012 is in sight.

The impact these two issues will have on the industry and the country, is huge. Because of congressional inaction, the business community cannot reliably predict what their tax liability will be in the coming year.

More than one hundred credits, deductions and expensing allowances that lower the tax liability for millions of households and small businesses are set to expire on Dec. 31, 2012. These include the lower individual tax rates under the Bush tax cuts, the lower capital gains and dividend tax rates, relaxed estate tax rules and a fix to keep the Alternative Minimum Tax from hitting millions of middle class Americans.

And if Congress can’t resolve the “fiscal cliff” issue by cutting spending and/or generating new revenues, severe and sudden cuts to military and discretionary spending will kick in as the New Year begins.

Regulations, Regulations and More Regulations

On top of the uncertainty about the “fiscal cliff,” federal agencies are sitting on a backlog of new regulations that have been in a holding pattern since before the election. It’s expected that new rules from the Department of Energy, the EPA and the Department of Labor will be released in the coming months.

How Have Our Contractors’ Attitudes Changed?

ACCA continued to gauge how contractors feel about short-term growth through its Contractor Comfort Index (CCI). 2012 marked the second full year of the monthly survey that asks contractors how they feel about new customer acquisition, existing business and employment numbers.

With an index of 50 or above indicating anticipated growth, in 2012 contractors were telling us that they were feeling optimistic, even more so than they were in 2011. The CCI had a high of 70 in May, the first time it has reached that high, and a low of 56 in both January and September.

And It Was Hot, Hot, Hot!

We all know we can’t control the weather. And thankfully, after a warm winter around most of the country this year, the temperatures heated up in the summer. Record heat for a second year in a row helped fuel business
for contractors.