Apparatus

Fire Service Forecast: Data-Driven Decision Making

Issue 12 and Volume 18.

By Paul C. Darley,
President and CEO, W.S. Darley & Company

In the movie “Money Ball,” Oakland A’s General Manager Billy Beane uses statistical information to create a winning baseball team. You can do the same with your fire department, company, or just about any organization.

“Where is the fire industry headed?” and “When will it turn around?” are the two most common questions I hear from those in the fire industry trying to navigate through these difficult times. No one knows for sure, but there are a lot of industry data we can use to help answer these challenging questions.

Data-Driven Decisions

I’ve always been a believer in data-driven decisions. When it comes to figuring where this industry is headed, I turn to sources such as the National Fire Protection Association (NFPA), the International Association of Fire Chiefs (IAFC), the National League of Cities (NLC), the National Volunteer Fire Council (NVFC), and the Fire Apparatus Manufacturers’ Association (FAMA)-just to name a few. Each organization collects data that it shares with the public and its membership.

Here are a few highlights of the data published from these different organizations.

The NFPA has an excellent research section on its Web site. One of the best reports is the Annual Fire Loss Report published each year in September. It is filled with more statistics than you can ever absorb, but high-level trends certainly emerge. For example, there were 1.375 million fires and 2,855 fire-related deaths in 2012. This was down one percent from the previous year and down more than 55 percent compared to 1977, when there were 3.3 million fires and 7,400 deaths. Fires accounted for only four percent of the 31.8 million calls in 2012, while 68 percent were EMS calls.

The search feature of the IAFC’s Web site is great, and there are more articles on fire industry statistics than you can imagine. I encourage you to go to its Web site and type in the words “Fire Stats.” You’ll be hit with 2,500 records ranked by relevance. You can quickly narrow this down through a refined search on the topic of your choice.

The NLC publishes the single best annual report for determining the future health of America’s cities, the “Research Brief on America’s Cities.” The 2013 report, released in mid-October, covers survey results from cities with populations ranging from 10,000 to three million residents. This report covers everything from building permit reports to spending activities. City finance officers report that they are now better able to meet their financial needs than at any time since 2007. This extremely favorable news is based on increased revenues and cuts in services. The report also addresses the 18- to 24-month lag between the general economy and municipal budgets.

The NVFC’s Web site has a section devoted entirely to statistics. There are 756,450 volunteer firefighters in the United States comprising 69 percent of the nation’s fire service. Of the 30,145 departments in the country, 20,200 are all volunteer, 5,530 are mostly volunteer, 1,865 are mostly career, and 2,550 are all career. The number of volunteer firefighters in the United States has declined by more than 18 percent since 1984. Major factors contributing to the decline include increased time demands and less focus on volunteering-this at a time when the average age of volunteers is increasing significantly.

The FAMA Web site also has some great tools, such as a weight and cube calculator to determine how much equipment can fit on your new truck. All United States fire apparatus manufacturers submit statistics on the number of new vehicle orders and those shipped each quarter. This detailed report is only for members, but the FAMA board has given me permission to share the following:

New orders for fire apparatus have increased recently. In the first quarter of 2013, new orders were up about 25 percent compared to the same period in 2011 and 2012. New orders were up five percent compared to the last quarter of 2012. The second quarter of 2013 continued strong, with new orders up 17 percent over the same period last year.

If this trend were to continue, annual sales would be up 25 percent compared to 2012. This is a big IF, as I don’t think the trend will continue. The numbers are skewed because of some large, nonmunicipal orders in these quarters. Regardless, it’s very favorable news.

Analysis

Key take-aways from the above research include the following:

• Communities are reporting far fewer fires, but fire departments are responding to more calls than ever- primarily EMS.

Municipal fire chiefs are clearly focused on budgets and doing more with less and they are worried about the rank and file. On the whole, the budget outlook looks better than it has in the past six years.

• Volunteer fire chiefs have never found it more challenging to find qualified recruits.

• Although the market for fire apparatus is improving, fire apparatus manufacturers and their dealers are fighting for market share in a depressed market. It’s a good time for departments to buy new apparatus, as prices are competitive and reflect savings that won’t be available once the next round of NFPA 1901 changes takes effect in 2015.

• Multipurpose vehicles are here to stay. From big cities to small volunteer departments, vehicles that can respond to all calls make economic sense while addressing staffing and true response needs.

Although I can’t say the market has finally turned the corner, the above is very positive news. In 2012, the United States municipal market was still down more than 40 percent compared to its zenith in 2008 when the market peaked at more than 5,000 trucks. Historically, our industry has relied on large municipal orders, and these have slowed during the past five years. Because of this, we are starting to see some pent-up demand, particularly in larger cities as municipal budgets show a more positive outlook. This, however, is tempered by a reduction in AFG grant funding and a lower percentage of awards being made for fire apparatus.

Fire department budgets are no longer sacred cows when it comes to municipal spending cuts. Fire chiefs need to fight for their share of the improving pie. Those who go to the city finance manager armed with the proper statistics will clearly improve their chances of winning budget approval. Once the dust settles over the next year or two, I project that we’ll likely see the market settle into a “new normal” of 4,250 to 4,500 new fire apparatus sales per year.

PAUL C. DARLEY is president and CEO of W.S. Darley & Co. He is a past president of the Fire Apparatus Manufacturers’ Association (FAMA) and served on the board of directors of the Fire & Emergency Manufacturers & Services Association (FEMSA). He has a bachelor of science degree in marketing and finance and a master’s degree in business administration.