Reid Ribble, CEO of the National Roofing Contractors Association (NRCA), recently joined our podcast to share recent developments pertaining to roof coatings and roofing contractors. Topics include NRCA's new health care program for roofing contractors; market developments and new trends; how COVID-19 has shaped the industry in 2020; and potential business impacts from the U.S. elections in November. A complete transcript is available below.
For more information, contact: NRCA, (847) 299-9070, www.nrca.net
[introductory comments]
Ben DuBose: Reid, good morning. How are you?
Reid Ribble: Hey, Ben. I’m doing great. It’s great to be with you.
BD: Thanks for coming back on. For those that may remember, we had Reid back in the origins of our COVID-19 interview series, back in March of this year, once the pandemic just got started. We’ll certainly touch on that a little bit as we move our way through this podcast, where we are in the recovery, and what it means for roofing contractors. Before we get into the issues of the day, tell our audience a little bit more about yourself. I know I mentioned some of it already, but what is it about your history that makes you such a natural fit to lead a roofing association like NRCA?
RR: I started in the roofing business back when I was 22 years old. I’m almost 65 today. About 1977 or so, I started in the roofing business. Started mostly as a residential contractor. By 1982 or ’83, we had moved mostly into commercial roofing. I did both commercial and residential roofing for about 35 years. Then in 2009, I sold the company to go ahead and run for Congress. But during that time, I got heavily involved with NRCA and was on their board of directors, became the chairman of the board in 2005, and spent a year as chairman.
So I’ve had a long time investing in volunteer work within the roofing industry. It certainly provided a good living for my family and I, helped educate my two boys through college, and actually became the launch pad for me to have a successful run to the U.S. House of Representatives. Then when I was done with my service in Congress, because I went in with a preplanned and pre-promised term limit, I left Congress voluntarily at a time where Republicans were serving in the majority, had no announced opponent, but I still decided to leave. Then NRCA came with an offer to become the new CEO upon the retirement of Bill Good, who was our long-term, three-decade, long-term CEO prior to me. So it’s a natural fit for me, and I’ve enjoyed my time with NRCA and being back in the roofing industry.
BD: As far as NRCA goes in particular, one thing that I know is new within the last couple of months is the healthcare program that you all recently introduced specifically for the roofing industry. Tell our audience a little bit more about the healthcare aspect of NRCA, what you’ve recently rolled out, and how that came to be. As I see it, it’s pretty innovated. You don’t see that much, in terms of an association that’s doing that type of program. Explain some background and what the origins of that were.
RR: Sure. We have dabbled in the past — when I say we, meaning NRCA and the roofing industry — has dabbled in the past with trying to come up with a solution for our members and for the roofing industry to have some type of affordable health insurance for both the principals and for their workers. But it’s always been difficult because you're dealing with 50 different state governments that you have to comply with, and coming up with a national program, quite frankly, had been a challenge that we were unable to accomplish. However, as we continued to explore it and we continued to have requests from our members about trying to come up with a solution to this ever-increasing healthcare problem, we continued to look at our options.
Finally, we decided to take a look at the potential of starting our own healthcare captive. The captive insurance industry has gotten very large, particularly in areas of workers comp and general liability, but hadn’t really had a big foothold in the health insurance space. But we thought that there was an opportunity here, so we partnered with a company called Vault Strategies. We attacked this problem via a rent-a-captive model where we’re participating in an established captive until we get enough insured lives to launch our own.
Inside this model, we answered the problems that have kept us from being successful in the past. One of those problems was providing a health insurance option — or options, I should say plural — to smaller contractors. We can insure down to two lives in an individual company. So we’ve got something for small companies while simultaneously having something for companies with several thousand employees. We’ve got a wide range of insurance options, so people can find something that fits the benefit model that they want to have for their company.
Most importantly, this can be written and underwritten through your local insurance agent. A lot of roofing companies have built longtime relationships with a local agent, and those agents have been reluctant to lose those customers to a national program like we’re speaking of. But by including the local agents in this process, we’ve really knocked down a significant barrier to its success. You can call your local agent, tell them, “I’m interested in the National Roofing Contractors health insurance program through Vault Strategies,” and they’ll be able to underwrite it locally. It saves a lot of time because they’ve got a lot of the data on your workforce already. We feel pretty good about where it’s at. Over 100 companies are now getting prices right now, and we’re hearing good results.
BD: That’s a pretty cool program. I suspect a lot of your members would want to take advantage of that. As far as your members go, aside from the healthcare program, what else is going on in the market in late October 2020 as it pertains to the roofing industry? When you talk to these members, what are some of the themes or the trends that you're hearing from those guys as it pertains to the market conditions right now?
RR: The answer to that question varies quite a bit. NRCA is a national association, so we’ve got members in all 50 states. What we’re hearing from our members depends on what type of work they do and also where they’re located in the country.
For example, if they’re in the Southeast part of the United States — Florida, Louisiana, Alabama, Mississippi, Georgia — they’re super busy because of the storm activity that was there. Let’s set that aside, because it’s a storm event that was so large and, quite frankly, so frequent in the late summer that that has spiked work and demand up dramatically in the Southeast.
For the rest of the country, it depends what type of work you're doing. If you're in the commercial roofing, industrial roofing area, you're likely to be experiencing somewhat of a slowdown now. In the upper Midwest and the Northeast, members are reporting that they’re still looking for work and they’re actively bidding work, which is a dramatic change from a year ago, when members were reporting that they were booked up through the winter and into the spring. We’re starting to see a slowdown around the country on commercial roofing, a dramatic slowdown after the summer in institutional roofing. What had happened, when all the schools shut down early back in March and April, they jumped on a lot of their roofing work. When I talk about institutional work, I’m talking about public schools, universities, hospitals, things like that. That work happened right away, and a lot of them wanted to front-end load a lot of that work. Some of them did work beyond what they would normally schedule for a single year. So people were really busy in institutional work in May, June, and July, and now that work has tapered off dramatically.
We’ve see a really nice uptick, however, in residential roofing. The residential roofing sector of the roofing industry has had a very robust year, equal to some of their best years, and it continues to be robust going into the late fall here. That’s driven in part by the fact that citizens were working from home, so they are more cognizant and more aware of problems with their roof. They received stimulus funds. If you had a family of four kids, you got somewhere around $3,500 of stimulus money. And, quite frankly, they weren’t spending money on vacation, which is a big-ticket item for families. They were cash-rich, and they were very aware. We saw a nice spike in residential roofing that’s now continued into the fall. It kind of, like I said, depends on what kind of work you're doing and where you're located in the country as far as market conditions.
BD: How much of a factor — when you were talking about those market conditions — is what’s going on with COVID? When you look at the landscape, there’s a ton of variance from state to state in terms of what the regulations are, and there’s also a lot of variance from one area of the country to another to what state has cases that are spiking. For example, Wisconsin’s been in the news a lot on that front. Obviously, I know you're familiar with that with regard to their case load. As far as roofing contractors, how much variance is there depending on, I suppose, the COVID cases or the regulations in their area?
RR: I think for the most part, a lot of the regulatory environment — and what I might say regulatory confusion that was there — that’s all kind of been worked through the system now. NRCA, with a lot of our industry partners, was able to lobby not just state governors but the federal government to make roofing services considered essential. For the most part, these roofing companies are working.
However, with that said, where we’re seeing big spikes — and you just mentioned Wisconsin, and they’re having a dramatic spike up — we are having more and more reports of roofing companies that have had employees tested positive for COVID. That becomes a big disrupter because now they have to do contact tracing. What other employees in their company did this particular employee interface with during their period of asymptomatic infection? In some cases, entire crews and also entire companies have been shut down for two weeks as they deal with a COVID case inside their business. That’s where we’re seeing the biggest impact.
BD: As far as roofing jobs and the materials they’re using — or the equipment, for that matter — we can talk about the coatings, we can talk about the equipment, but for those contractors that are fortunate enough to be able to move forward in this environment and of course find the work, are there any products or technologies that you're seeing that are popular with your members this year? What I mean by that, of course we’ve had in past years cool roofs or white silicones have really taken off. So I’m just curious, be it materials or equipment, are there certain types of products or technologies that have momentum this year with your audience?
RR: I would say a couple things. First of all, in the fluid-applied side of things, the fluid-applied systems are seeing nice growth all throughout the country. You mentioned silicone. There’s a lot of our members that are doing two-part or multiple-layer silicone projects with sometimes a base layer of urethane and then silicone cover. Those systems, because they go on so easily and you can cover a lot of square feet with less labor, have become increasing in popularity. As the manufacturing community improves performance, we’re seeing more and more traditional roofing companies using fluid-applied systems.
What we’re seeing I think nationwide is a trend toward any type of system that will reduce labor on the install side of the roofing system. Manufacturers over the last decade or so have responded nicely to the demand for workforce in the sheet systems — whether TPO, PVC, or EPDM — providing large sheets, providing better ways to install it, providing different types of fluid-applied adhesives that can speed up the application and allow roofing contractors to get on and get off that job as quickly as possible. I wouldn't say that I’ve specifically seen a dramatic shift this year in any particular system other than an ever-increasing awareness on the roofing contractors’ side of trying to reduce labor on every single job.
BD: That makes a lot of sense in this environment, definitely. Switching gears a little bit, as I referenced earlier, you were in Congress as recently as four years ago. There’s obviously a pretty big election coming up all around the country two weeks from when we’re recording this, on Tuesday the 20th. When you’re looking across the country at various candidates and platforms, when your members are considering their options, what are some of the policy issues or talking points that potentially matter as it pertains to roofing companies, the industry, your members. Obviously you hear a lot of talk in various races about incentives for small business. So from a policy perspective, for the roofing industry, what are some of the topics that you're looking at politically that might matter to your contractors?
RR: I’ll start off by saying this. The policy things that matter to the roofing industry create a mixed bag for selecting who you might want to have in control.
BD: True.
RR: For example, the Tax Cut and Jobs Act had some significant improvements in the tax code for commercial roofing contractors and for commercial real estate owners. Prior to that bill, if you replaced the roof on a commercial building, you would have to depreciate that expense over 39 years, whereas the Tax Cut and Jobs Act, signed by President Trump in 2017, allowed commercial real estate building owners to expense up to $1 million of that expense in year one. That was a significant change in the tax policy, as well as a significant reduction that was done in that same bill on the corporate tax side, whether you're a C-corporation or an S-corp. The roofing industry wants to see those changes become permanent in law and are not undone, because they really stimulated the roofing economy over the last three or four years. Those were significant gains. In that case, many roofing company owners would say, “Man, we need to re-elect President Trump.”
I would say that’s also the case when it comes to the regulatory environment. President Trump has been very good on the regulatory front for the roofing industry. So there are a couple wins there. However, President Trump’s been relatively bad for the roofing industry in terms of immigration reform, in terms of workforce development, in terms of trade. Those things were a net negative. In that case, we typically would find Democrat leader in Congress or in the White House to be more amenable to making changes to immigration policy, trade policy, and to those types of things that would help us get a better workforce. Depending on where you are in your business, you’re going to be making a determination to support the candidate that you feel is going to most likely improve what matters most to you. I would tell you that our members are pretty much all over the map on it in this election. NRCA does not make endorsements in the presidential race. We never have, and we don’t really intend to here.
BD: That makes sense, and I think that’s a good way of characterizing it, just framing it within the competing interests, and then of course let your members decide as far as where they are, what their individual priorities are on these various issues and so on and so forth. Reid, before we sign off, for anyone listening who, on that front or any other when it comes to the roofing industry, roof coatings, roof contractors, for anyone who wants more resources from you guys or you in particular, what’s the best way that they can reach out and get that? I’m assuming it’s the website. But for anyone that needs more information from NRCA, what’s the best way they can take advantage of those resources?
RR: You mentioned the website. That’s obviously your first entry point because there’s so much information there. Depending on what your concern is and how we might be able to help you — like if it’s a technical question, if you go to our website you can go right to our contacts list and get right through to one of our technical experts. If it’s a risk management, the same thing. If it’s a legal, the same thing. We’ve got experts that are ready, willing, and able to respond to both your emails and phone calls. Start at the website and shoot us a note.
And you can always reach out to me. My email address is rribble@nrca.net. You should always feel free to reach out to me, and we’ll try to connect you with the person that’s best able to help you with whatever question or engagement that you’d like to have with NRCA. There’s a lot of things that, of course, we reserve for our members. We’d love to have everybody as a member, but we also do a lot and help people that aren’t members. We want to make our case and help win you over at some point if you're not a member, and we have a lot for you even if you're not a member. Start at www.NRCA.net.
BD: Sounds great.
[closing statements]