2012 Pest Control Industry Forecast – How War Will Change It All

For the past four years, problems in the macro-economic outlook played a predominant role in the forecast for business, with pest control being just one sector subject to this same horrible dilemma, almost totally outside the control of the industry. It has been a game of duck and cover.

On a humorous note, check out this video. It gives you a sense of the naivete of the western world. I think we have been similarly left clueless about the magnetude of the problem before us.

Technological change has hit many companies hard as internet broadband access got our prospects to make the transition to on-line everything, consuming web pages the way people once consumed Readers Digest, network television channels and your local paper. This trend will continue. Adjusting to the web, with search, social search and social profiles stored by internet giants such as Google and Facebook, will be more critical than ever in the pursuit of new customers. Traditional methods of advertising could still work, but tread cautiously.

Pests wax and wane in their public health significance. Bed bugs are creating fortunes in the pest control industry the way the Y2K “millenioum bug” craze sent IT stocks soaring for a few years. Bed bugs will stick around, bringing in more revenue to many companies while simultaneously destroying others with lawsuits.

The termite industry will eventually have a natural recovery to the same degree the housing market recovers. But burned once, many companies have already soured on fumigation or the termite industry as a whole. Those who remain will do very well in a less competitive market.

As the saying goes, there will always be pests. That’s why as business persons, we love this low tech industry. Competition in the industry will not change that much so as to be a major factor. The pest control industry is so competitive and vast that no one company can dominate. Labor quality is such that the largest companies are often as weak as the mom and pops, when you do a QA on the performance of line pest control technicians. So the fun mix of small, medium and large pest and termite companies will not change in any dramatic way.

No. While duck and cover is not the right approach to business success, the past four years has taught businesses, large and small, to watch the bottom line, especially when factors largely out of our control have a trickle down effect. Of course the last four years was more like Niagara Falls. If you didn’t learn some sound financial management you were out of business. Credit may be king, but just as an Ace trumps a king, cash reserves trumps all. Cash reserves are and will always be a far more powerful and reliable tool than credit.

No one is in pest control because of a brilliant knowledge of world politics, but listen up. The world is headed for a major war on top of an already staggering global economic mess.

In the last four years we have had serial and overlapping crises in housing, credit markets, the financial sector, government deficits and then worse yet, government credit crises with impending government defaults. Throughout we have had far higher rates of unemployment than the prior 60+ years.

As if that wasn’t enough of a kick in the ass, we have revolutions throughout the Arab world, mistakenly called an “Arab spring,” that bares much more resemblance to the French and Russian revolutions than the American Revolution. The so-called “Arab spring” is built upon a world steeped in religious orthodoxy and perhaps equally important, a horrendous rate of illiteracy. Fanaticism and ignorance do not make for good outcomes. Unfortunately, the world has been banking on fulfilling its’ energy needs from this most unstable source.

At the very core of the Arab revolt was a non-Arab, Moslem revolt that occurred in 1979. Were we to turn the clocks back, we would resoundingly have demanded that Jimmy Carter bomb Iran until the Ayatolla led regime in Iran crumbled. Now, 33 years later, after Iran has mobilized terrorism around the world – with far more centralized purpose and reach than Al Qaeda, the world will watch terrible climactic events.

There are no good outcomes. The solutions range from terrible to horrendous. No one can truly predict how it all will end. Important questions, such as the future outlook of nuclear Pakistan, will haunt any prognosticator.

Since before Israel was established, it has been faced by enemies who sought a genocidal destruction of the Jewish state and all its’ inhabitants. Three thousand years of collective memory, culminating in “The Final Solution,” created a fortress mentality in Israel. Regardless of Israel’s overwhelming desire for peace and its’ magnificent economic success, it will eventually be pushed to the brink by the genocidal vision of Iran and its’ allies. Israel will fight to the death, not waiting for death to come.

A few major terrorists attacks around the world, the most obvious and memory rich event being the bombing of the World Trade Center, but others too:

July 2005 “7/7” terrorist bombing in London

and the Bombay terrorist bombing of Nov. 11, 2008

convinced a broad segment of the public, politicians and the military, that the Israelis were right all along. There is a culture war of civilized modernity against theocratic and autocratic forces that plays out in terror and destruction. This war will come to a climax very soon due to the nuclear ambitions of Iran and a mentality that will permit its’ use in a genocidal war.

Sanctions against Iran will not work any better than they worked against North Korea’s reach for a nuclear arsenal. North Korea has maintained the peace – but North Korea is not an evangelical, end-of-days Islamic state that values death over life.

Should Iran get the bomb, then we will be “kicking the can down the road” the same way we have done it with our economic issues, propelling the problem to a far more critical point. In the interim, resources worldwide will be redirected to war spending. We will still have a major war, with modern day fools equivalent to Neville Chamberlain.

Should we address what we should have done during the 1979 Iranian hostage crisis, Iran will be attacked. There will be a Middle East regional war with the involvement of super-powers. Industry and energy worldwide will be immensely disrupted. When its’ over, the blame game will continue, but history will say that the world answered the challenge. Only then, will the world economy recover and grow to far greater levels. The equation of energy controlled by those least responsible in the use of its’ profits will come to an end and the looming threat of terror will greatly subside.

The world will never be the same, but hope will triumph and in that hope you will see an economic recovery stronger than you can imagine. Hold on to your seats for a very rocky 2012, starting in April and getting worse through the summer. If you want your pest control company to survive this dismal forecast, know that credit can be revoked. Cash reserves will always be the trump card. Hope for the best but prepared for the worst!

2 Responses to 2012 Pest Control Industry Forecast – How War Will Change It All

  1. This one is exhilaratingly good to read.From economic point view,the author truly captivates the essence of how pest industry will fared down with its counterparts.

  2. Gerry says:

    Thank you for reading and commenting on this post. I appreciate your agreement, but I am most happy if it is helping to clarify a topic and helping you to prepare for the future. We in the pest control industry do not work in isolation from all other events around us. As you read, in these times more than ever we need to consider the macro picture in planning our business future.

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