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
Jul 17, 2024 - Social Media Influencers Boost Interest in Skilled Trades
- Some young workers in the skilled trades are finding a wide following for their social media posts that chronicle their day-to-day activities on the job site, according to The Wall Street Journal. Interest in the skilled trades among Gen Z is growing as many younger workers look for employment that doesn’t involve taking on large amounts of debt and offers competitive wages. In 2023, enrollment in vocation-focused community colleges increased by 16%, marking the highest level since the National Student Clearinghouse began tracking the metric. For many younger job seekers, skilled tradespeople posting about their work on social media sites is their first exposure to the trades, and construction insiders report that such posts can help in recruitment.
- Home builder confidence in the single-family market dropped in July to the lowest level since December 2023 amid high mortgage rates and elevated builder financing costs, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell one point to 42 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 31% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged for the thirteenth consecutive month.
- A trend in smaller lot sizes for single-family detached homes has accelerated in recent years, according to the latest Survey of Construction by the US Census Bureau. Even as more families decamped to suburban areas seeking more space during the pandemic, lot sizes have continued to shrink. In 2023, lot sizes of less than 0.16 acres (less than 7,000 square feet) accounted for 40% of new single-family home sales compared to 30% in 2011. The share of lots under 0.16 acres has risen two percentage points since the pandemic began. Shrinking lot sizes suggest that firms that build homes speculatively have reduced lot and home sizes to cope with lot shortages and to offer more affordable homes as housing costs have risen.
- Low- to medium-density multifamily building construction has grown to account for a larger share of the overall multifamily market in recent years, according to National Association of Home Builders Analysis of US Census Bureau data. In 2024, there were 450,000 multifamily housing unit completions, marking the highest level in 37 years. Of those, 216,000 were buildings with fewer than 50 units, which was the largest share for low- to medium-density buildings since 2006.
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