As 2013 opened President Obama and the Republicans seem to have struck a compromise deal avoiding tax increases and spending cuts for the middle classes, pulling the US economy back from "the fiscal cliff" but the next few months will still be critical.
According to figures released in November 2012 by the USA Department of Commerce, real gross domestic product (GDP) increased by 2.7% in the third quarter, up from the 2% originally forecast and a significant increase on the 1.3% growth experienced in the second quarter of the year.
The third quarter of 2012 also saw a 9.5% increase in real federal government consumption expenditures and gross investment, in contrast to the 0.2% decrease in the second.
This reflects the experience of many of suppliers in the laundry industry. Simon Nield, president of Jensen USA, says that the company did not experience the normal slowdown in the months leading up to the election. The next three to four months will provide a good indication of what will happen in the next term.
He says the healthcare sector survived the recession well and the retail medical sector, which includes doctors’ practices and outpatient clinics, also saw growth. The industrial food and beverage sectors suffered from the recession but are now showing signs of a slow recovery.

Growth forecast
Joseph Ricci of the Textile Rental Services Association (TRSA) says that the USA textile service industry’s three public companies – Cintas, UniFirst and G&K Services – are forecasting around 5% growth for their 2013 fiscal years. He thinks that this is a realistic estimate for the rest of the industry, depending on what happens with the economy.
Rick Kelly at Milnor agrees. He says the hospitality sector has seen some growth in construction, which is expected to continue in 2013. In addition, he says, while uniform plants are still recovering, manufacturing has been expanding, helping those plants that provide services for uniforms and dust control. He says that last year’s mild weather led to a drop in business for dust control, but a return to more typical weather will help the sector recover.
Bill Bittner at Alliance Laundry Systems is also optimistic. "In 2012 we saw a significant increase in interest from first-time investors, existing store owners looking to increase their profitability and on-premise laundry (OPL) managers looking to increase efficiency," he says. "Our sales pipeline is more robust than I’ve seen it in years."

Destination laundromat
Although the country’s vended market is saturated, with the Coin Laundry Association estimating a total of around 35,000 laundromats, Bittner believes there is still an opportunity to renovate laundromats that are not operating to their potential and make them more efficient. "Laundromats today are more than just a building with a few machines inside; they are destinations," he adds.
The trend is for coin-ops to have a bright, modern design and offer attractions such as wi-fi and flat screen televisions with cable, lounges, coffee bars or even post office services. Their machines are high-tech and provide customers with greater control.
Paolo Schira from Electrolux says there is a structural difference between coin-ops in large cities and those in the suburbs. For example, laundromats in metropolitan areas need to do that something extra to be viable. Electrolux laundromats in these areas offer a Text Messaging Information Service to let customers know when their laundry will be ready.
In the suburbs, replacing old machines is more important. Here businesses need affordable solutions that are solid and robust while saving water and energy, says Schira. He cites leading coin-op brand Wascomat as a company that has followed that route.
Eduard Colomer from Domus also sees potential in the US coin-op market. Although Domus is not currently focussing its efforts on the US, it has studied the market and sees opportunities for future sales in the sector. He says that in the last few years many of the coin-ops had low-spin machines but what I can see is that step by step more will be using high-spin machines as they do in Europe.

Three worries
Launderers are worried about three things, according to Rudi Moors from Christeyns: The high debt of the federal government, possible higher employee costs as a result of Obamacare and the possible increase in regulation.
"This reinforces an uncertainty, already felt due to the economic crisis. The election results did not reduce or remove such concerns."
As a result, investment programmes will remain limited and cost savings will become essential, which is why Christeyns is focussing on helping customers reduce utilities and other costs.
Bill Westwater of Xeros, says the company is currently working on introducing its virtually waterless laundry system to the USA.
The Xeros system uses polymer beads to deliver incremental agitation in the wash, removing stains and allowing laundry to be cleaned at lower temperatures. It is currently being piloted in four different types of business and will have its main launch at the Clean Show in June.

Safety, environment, compliance
Michael Dreher from Kannegiesser USA says insurance premiums for businesses are likely to rise by around 20%, as a result of the implementation of Obamacare, so companies are looking to reduce costs through automation and energy savings. National accounts are already looking at advanced tunnel washer systems and automated garment processing.
"Government agencies will increase their focus on safety, environmental impact and procedure compliance and further look into any and all tax implications," he says. "Industrial laundries have to be ready for these changes and to re-evaluate their present operation as well as to prepare for any substantial equipment purchases."
Certainly, the TRSA is concerned about the impact of increased taxation on entrepreneurs that could curtail their ability to create jobs.
However it says additional taxation (removing benefits) on companies that export jobs would impact positively on TRSA’s industrial members. "We like the idea that the President supports investing in the manufacturing sector, although we know blue-collar, heavy-soil jobs, the kind that were best for industrial uniform laundering, won’t come back in droves," Ricci says.
The organisation is supporting the proposed Workforce Democracy and Fairness Act, which blocks moves to shorten the period in which employees can vote on union representation, as well as the Federal Prison Industries Competition in Contracting Act. This aims to curb federal prisons from competing with entrepreneurs for private sector business.
The TRSA has developed a number of certification programmes for members, such as Clean Green, which recognises laundries for their conservation practices and water and energy use. It predicts that by the end of 2013, 300 of the estimated 1,500 USA textile services plants will be Clean Green certified. In addition, in a voluntary agreement with the EPA, TRSA members have committed to eliminating nonpolyphenol ethoxylates (NPEs) from their liquid detergent formulae by the start of 2014.

Family businesses
The USA drycleaning sector continues to be dominated by small, family-run businesses with only a few large operators. "If new franchisor competitors – such as Tide Dry Cleaners – are successful in securing good locations and operating efficiencies, then this balance could shift but it remains too early to tell," says Tim Maxwell of GreenEarth Cleaning, which now has over 960 licensed locations in the USA.
As the dress code becomes more casual, so drycleaners in the USA are turning more and more to laundry and wetcleaning, says Mary Scalco of the Drycleaning and Laundry Institute (DLI). Existing customers are bringing in more pieces to be cleaned as a result.
One of the main changes in the industry is the move to alternative solvents. In February 2012 the Environmental Protection Agency (EPA) reclassified perc as a "likely human carcinogen".
While California is the only state to have instituted a ban on the chemical so far, the industry itself is moving away from perc, according to Scalco. She says that perc is now used by just around 60% of drycleaners, significantly down from the 90% who used it just a few years ago.

Funding difficulties
One of the challenges drycleaners face in changing over to the machines is securing finance. "Banks still prefer to put money into financial investments rather than loans," comments Renzacci’s Marco Niccolini. He says that the inability to secure financing has forced some drycleaners to close after their local authorities have told them to change their machines.
Although Niccolini is optimistic about the opportunities the Clean Show will bring in enabling suppliers like Renzacci to tell customers about their latest developments, he says its final potential rests on whether or not the banks have opened up lending.
Another issue is labelling, according to Maxwell. The Federal Trade Commission (FTC) is in the second year of the process to update its care labelling standards, first initiated in September 2011.
"The proposed rulemaking issued in October 2012 suggests that the FTC plans to modernise the care label rule in a number of ways, most notably by officially recognising wetcleaning as a professional cleaning method and including alternative solvents in its definition of drycleaning," he says.
While the development is to be welcomed, he points out that many in the industry, including GreenEarth, have posted public comments online to petition the FTC to work with the ASTM and ISO [which have already approved care symbols for wetcleaning] to also include alternative solvents in their symbol definitions. "Currently both the symbols standards and the FTC only recognise perc and petroleum," he says.
Adco Products, the US distributor of Rynex, predicts that environmental pressures will bring a push to employ more raw materials from renewable resource-based feedstocks and away not just from perc but also from petroleum products.
"The types of products that drycleaners use will be changing, which will result in drycleaners having to learn to do things differently," according to Dr Jim Schreiner, chief innovation officer at Adco.
This will be accompanied, he adds, by changes in the types of new garments entering the consumer market that will need alternative processing, including low temperature drying and finishing, water repellency and antibacterial coatings.
The environment has changed significantly for drycleaners in the USA and is likely to change even more.
So the DLI is working to widen the range of members it supports and has opened its Encyclopedia of Drycleaning to operating plants. It will also be offering its self-study course online.
"We are trying to make members better quality cleaners," says Scalco.