HVAC & Plumbing Contractors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 105,000 HVAC and plumbing contractors in the US provide installation, repair, and maintenance services for air handling and water management systems. Just over 60% of HVAC and plumbing contractors are solo operators. Contractors may specialize in residential, commercial, institutional, or industrial service.
Dependence On Construction Industry
Demand for HVAC and plumbing services is highly dependent on trends in the construction industry.
Increasing Sophistication Of HVAC Systems
Demand for improved efficiency in the non-residential market has led to increasingly complex HVAC systems and automated monitoring programs.
Industry size & Structure
The average plumbing and HVAC contractor employs 11 workers and generates about $2 million in annual revenue.
- The HVAC and plumbing contractor industry consists of 105,000 companies (including solo operators), employs more than 1.2 million workers and generates $218 billion annually.
- Just over 60% of HVAC and plumbing contractors are solo operators and generate about $65,200 annually.
- Major customer segments include single family homes (20% of industry business), office buildings (10%), manufacturing and industrial buildings (5%), educational buildings (8%), commercial buildings (7%), health care and institutional buildings (6%), and apartment buildings (4%).
- Large companies include EMCOR Group, Comfort Systems USA, Johnson Controls, and ARS Rescue Rooter.
Industry Forecast
HVAC & Plumbing Contractors Industry Growth
Recent Developments
Jan 13, 2025 - Nonresidential Building Construction Planning Improves
- The Dodge Momentum Index (DMI) increased 10.2% in December 2024 to 212 (2000=100), up from the revised November reading of 192.3. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component improved by 14.2%, and the institutional portion increased by 2.5%. Dodge’s associate director of forecasting, Sarah Martin, said, “Commercial activity rebounded strongly in December, thanks to a re-acceleration in data center and warehouse planning activity. Overall, the strong performance of the Momentum Index this past year is expected to support nonresidential construction spending throughout 2025.”
- In the third quarter of 2024, the volume of outstanding residential acquisition, development, and construction (AD&C) loans made by FDIC-insured institutions declined for the third quarter in a row, according to the National Association of Home Builders (NAHB). The value of residential AD&C loans in Q3 2024 was $490.7 billion compared to $495.8 billion in Q2 2024. The volume of residential AD&C loans is expected to rise in 2025 as the Federal Reserve continues its monetary easing policies, but potential headwinds include the federal deficit and economic uncertainty.
- The total value of construction put in place was unchanged in November compared to October, according to the US Census Bureau. Spending on nonresidential projects decreased by 0.1%, and residential spending rose by 0.1%. Within the nonresidential building segment, pockets of spending growth included religious and healthcare, which saw increases of 1% and 0.1%, respectively. Commercial construction was flat in November and all other nonresidential building segments saw spending decline in November, led by public safety (down 1.3%) and followed by amusement and recreation (-0.7), lodging (-0.4%), educational (-0.3%), and office (-0.2%).
- According to some industry insiders’ estimates, the 2024 housing market may have been the slowest in nearly 30 years as high mortgage rates and home prices combined with extremely low housing inventories have kept homeowners locked in place and would-be homebuyers priced out of the market, according to The New York Times. The National Association of Realtors estimates that four million homes were sold in 2024, marking the second straight year of historically weak activity, and the slowest home sales since 1995. Market observers note that the housing crisis is a product of weak supply. Builders have struggled amid lingering pandemic-era problems, including high borrowing, labor, and materials costs. Freddie Mac estimates the housing shortage equals about 3.7 million homes. The outlook for 2025 remains uncertain as home prices and mortgage rates are expected to remain stubbornly high.
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