Each year, along with Fall comes the cold and flu season and for 2020 specifically a second wave of COVID-19. It is always difficult to project the future for the fire service, but we can reflect on the past to help give us some clues. The Fire Apparatus Manufacturers’ Association (FAMA) has been collecting data from its members on the bookings of new apparatus for many years to provide our members a way to gauge the state of the fire apparatus industry. As all fire departments are feeling the impact of COVID-19, it is a good time for FAMA to share some data to provide a larger picture.
FAMA collects detailed apparatus booking data but, for this article, we will examine the data simply through the following types of apparatus: aerial, ARFF, brush trucks, pumpers, rescues, and tanker/tenders. Secondly, we will examine the difference between second and third quarter 2020 (impact of COVID-19) with the previous nine quarters (going back to Q1 2018) as a baseline. With these parameters in mind, the following Q&A will tell us what is happening.
HAS COVID-19 IMPACTED NEW APPARATUS PURCHASING?
Yes, in Q2 2020 there was a 35% drop in total bookings compared with total apparatus bookings from the previous two years. There was a bit of a rebound in Q3 2020—bookings went back up, but the market is still off 19%, a total decrease of around 27% compared with historical averages.
WHAT APPARATUS HAS SEEN THE GREATEST IMPACT?
The data show that rescues are the specific apparatus seeing the highest decline from the historical average. Bookings of rescues in Q2 and Q3 2020 declined almost 41% compared with the previous nine quarters. In addition, there are some bad signs for brush truck sales. While their sales were the least impacted in Q2, falling only 13.5%, brush trucks did not rebound in Q3 like every other apparatus category. Instead they declined further, dropping 25% from the historical average.
ARE THERE ANY POSITIVE INDICATORS?
Yes, there are a few positive indicators in the data. First, there was a rebound in apparatus purchases in Q3. As we begin to come out of the shutdown, bookings are off by 19% from the historical averages. You might say that 19% off is not positive, yet it is when you consider that Q2 bookings were off 35%. A second positive indicator is that Q3 tanker/tender sales actually increased almost 2% from the historical average. Finally, pumper sales rebounded as well from being off 36% in Q2; in Q3 they were off 18%. This is significant for the fire service as pumpers are the most common apparatus purchased and make up 57% of all apparatus purchases historically.
While I generally do not like predicting the future because of the many variables and because I am not an economist, I can only provide my opinion based on what I have seen and think regarding what is currently happening in the world. I think there are three connected drivers that will affect our futures: the economy, COVID-19, and the U.S. elections.
First let’s look at the economy prior to COVID-19. U.S. unemployment was hovering slightly below 4% when the shutdown occurred. It spiked to 15% in April, and it has been working its way back down after reopening, currently at 7.9% as of October 2 according the Bureau of Labor statistics. Employment is a good gauge of tax bases for communities in which apparatus can be purchased.
Secondly looking at COVID-19, when the U.S. shutdown in April, COVID cases spiked at 36,741 in a single day, and stayed flat until late June when they began to rise again, hitting a max of 75,687 on July 16 and falling back down thereafter. With Fall, the COVID numbers are on the rise again with a second wave. As I am writing this article, highest single-day totals continue to fluctuate. This is significant as a spike might lead to other negative impacts on the economy and potentially another shutdown or possibly more restrictions impacting the service sectors. In the long term, if people can’t get back to work, there could be a cascading effect on mortgage payments and property taxes. Home values could go down, further impacting government income.
WHAT IT MEANS TO FIRE DEPARTMENTS
So, what does this data mean to fire departments and can it help them when it comes down to purchasing new fire trucks? With manufacturing backlogs being so strong prior to COVID-19, the drop in orders in Q2 and Q3 2020 are going to have little to no impact. Bert McCutcheon, vice president/general manager at Ferrara Fire Apparatus ,and Jeff Mazza, president Bulldog Fire & Emergency Apparatus comment below.
“What we do know: component pricing will continue to increase. Suppliers and manufacturers are feeling wage pressure as employee wages and benefits increase along with the additional costs of providing a safer, cleaner, and healthier work environment. The competition for keeping and hiring good employees is being felt by all manufacturing businesses, not just specifically to the fire industry, and because of competition, manufacturing job wages are increasing rapidly.
“The added need for technology improvements to protect firefighter’s health and safety will continue to increase the base costs of all fire apparatus. “Clean cab” was already a developing standard for cancer prevention, and soon we will see the addition of virus protection technology for cabs.
“The above will continue to drive the pricing of new trucks upward.
“The cost of maintaining older fire apparatus is going to increase as well as their lack of safety features the fire industries continued focus on new technology for health and safety for fire fighters will push the fire departments to purchase.
“With current interest rates and municipal lease financing at historic lows, it makes sense to purchase and not postpone buying today.”
FAMA is committed to the manufacture and sale of safe, efficient emergency response vehicles and equipment. FAMA urges fire departments to evaluate the full range of safety features offered by its member companies.