[2005 State of the Industry Report] Termite Market

Despite reports of weaker-than-normal swarm activity, the termite market remains an area of strong growth for many PCOs. This year it was the top growth pest for the industry, being named as the largest growth market by 30 percent of the respondents in PCT’s survey. More PCOs selected termites as their top growth pest than those who selected any other growth pest. And it was the first time since 2001 that termite control edged out ant control as the top growth market for the industry.
Furthermore, about 66 percent of PCOs said their 2004 termite treatment revenues increased over the prior year. In the previous survey, about 61 percent reported an increase in termite treatment revenues. Just over half, or 51 percent, of PCOs said they increased their termite treatment prices for 2005. That’s a slight increase from last year, when 49 percent said they increased prices.

SO-SO SWARMS. Interviews with PCOs from around the country indicated that this season’s termite market brought another year of so-so termite swarms in many parts of the country. Cold spring weather in the Mid-Atlantic region contributed to a poor swarm season there, said Tom Forshaw, president, Forshaw Distribution, Charlotte, N.C. “We did not see any big swarm season,” he said. Then later in the summer, massive heat waves led to delays in work getting done, he said. He noted that outdoor treatments, especially termite treatments, can take twice as long to complete in hot weather. Above normal amounts of rain in the Southeast also meant some PCOs had to delay termite treatments. Forshaw serves pest control companies located throughout the Eastern United States.
Andy Douglas, president, U.S. Pest Protection, Nashville, described his area’s termite season as below average. “I don’t think we had more than about two or three weeks of what I call a serious termite swarm,” he said.
And Leland Morris, president, Bizzy Bees Pest Control, Carrollton, Texas, also described a weak termite season. His company serves the Dallas-Ft. Worth area. “It hasn’t been like it used to be,” Morris said. “It’s stabilizing to be just a little bit better than the prior year.” Morris said he believes that the increased use of the newer non-repellent termiticides in recent years are keeping termites at bay longer.
“I think that termiticides have improved over the years,” Morris said. “I think that treatments are lasting longer.”

THE FLIP SIDE. Meanwhile, PCOs on the West Coast reported good termite swarm activity. Tyler Bennett, manager, Key Termite & Pest Control, Atascadero, Calif., said a wet winter combined with higher than normal spring and summer temperatures may have led to earlier termite swarms. For subterranean termites, he said, “we were getting some swarms in late February, early part of March.” Normally swarms are expected toward the end of March, Bennett added.
Although weather in many areas was less than ideal, continued strength in the housing market kept termite business at a healthy level for many companies. Forshaw said all things considered, termite business in his area was down just a bit from last year, perhaps by only 5 to 10 percent.
In particular, continued activity in the home refinance market, as well as high levels of new and existing home sales, kept the demand for termite inspections, pretreatments and post-treatments high. “When that part of the market goes away,” said Forshaw, “even if we have tremendous swarms, we will not be up to last year’s business.” Forshaw explained that companies more involved in the pretreat and inspection markets were not down as much as those that depend more heavily on swarming activity.
Mortgage rates were still close to historically low levels during much of the spring season, hovering near 6 percent for a 30-year loan. And record levels of home sales, of both new and existing homes, also increased the demand for both inspections and termite pretreatments in the spring and summer months.
Bennett said his company’s termite business was up 25 percent over last year. “We’ve had good increases for a while,” he said, “but I don’t think it was quite as strong last year.” He credits California’s strong housing market for some of the increase in termite business, Bennett said. “We’re doing a lot more inspections,” he said.
And Danny Watson, branch manager, Peachtree Pest Control, Norcross, Ga., described the termite swarm there as “OK,” but termite business as “good,” owing largely to the strong housing market in Georgia. Another factor is people’s desire to protect their homes from termites before infestations even become evident. “We’re doing a lot of termite and pest control contracts,” Watson said. “I think people are just trying to maintain their homes and protect themselves from termites.”
Mickey Nolen, president, Nozzle Nolen Pest Control, West Palm Beach, Fla., whose company serves Florida’s east coast, says he’s also had a good termite season. “We had a better season than last year, and last year we had a good season,” he said, “so it was just under exceptional.”
He explained that termites have grown faster than the pest control side for the last two years. He credits the growth to other factors. “On the fumigation side, there are less fumigators out there,” he said. Furthermore, the recent hurricanes in Florida may have also spurred business in the termite market, he noted, especially considering the number of homes with parts of roofs being ripped off. “It just opened up areas where we could see live termites,” he said.
Today more than three-fourths of all companies, about 76 percent, are involved in the termite control market. This is a significant increase over 2001, when about 62 percent reported being involved in this market.

SERVICES OFFERED. Of those PCOs now in the termite market, most (62 percent) use both baits and liquids to control these pests. Just over one-third, meanwhile, use only liquids, and about 3 percent use only baits.
U.S. Pest Protection, for example, uses primarily liquids to control termites. “We know that baits work,” Douglas said, “but they are slower to work. And on wood-destroying insects, we’re not one to allow damage that’s done in the process of that work.”
Advanced Pest Control, Stafford, Texas, uses baits for the vast majority of its termite work, says Richard Weisman, managing partner. “We have a very well trained technician force, and that’s always a key factor,” Weisman said. “It requires a higher degree of skill to work with any type of baiting system,” he added.
Meanwhile, Bizzy Bees Pest Control has the practice of offering both choices to customers. “We use both baits and liquids,” Morris said. “We present both and let the customer decide.” soi

The author is former managing editor of PCT magazine and a frequent contributor. She can be reached at lmckenna@giemedia.com.