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 102,300 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 102,300 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
Apr 16, 2024 - Industry Growth to Rebound in 2025
- The HVAC and plumbing contracting industry is expected to see almost flat sales growth this year, but demand is projected to improve in the following four years. The industry’s year-over-year sales increased by 10.6% in 2022 before dropping to 3.2% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to fall to 1.1% in 2024, then rise by 6.9% in 2025. The industry will then see steady average annual growth of about 6.8% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- The housing construction industry continues to experience a significant labor shortage, according to a recent report by the National Association of Home Builders (NAHB). In the March NAHB/Wells Fargo Housing Market Index Survey (February data), 55% of home builders reported shortages of plumbers, and half said there was a shortage of HVAC technicians. While immigration has helped to ease worker shortages in some trades, others – including plumbers and HVAC technicians – require substantial training and licensing and attract fewer immigrants.
- Total nonresidential building construction spending is projected to rise 9% in 2024 over 2023, according to FMI’s second-quarter 2024 North American Engineering and Construction Outlook. With growth of 19%, manufacturing will lead 2024 nonresidential building construction, followed by lodging (14%), public safety (12%), and transportation (10%). Some other segments of the nonresidential building sector face headwinds, including high interest rates, inflation, and tighter lending standards. These pressures and high vacancy rates will limit office project spending to 2% growth in 2024. Led by a weakening warehouse segment, commercial project spending is forecast to decline by 2% in 2024. High interest rates will also challenge the housing market. Single-family construction spending is forecast to be flat in 2024 after falling 14% in 2023. Spending for multifamily is expected to decline 8% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 2% in 2024 after falling 5% in 2023.
- Home builder confidence was unchanged in April as mortgage rates and inflation remained elevated, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), was flat at 51 in April 2024, which marked the breaking of a four-month streak of HMI increases. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said that while hotter-than-expected inflation data have given some potential buyers pause, the trade group continues to expect the Federal Reserve to announce future rate cuts before the end of the year, which will lead to moderating mortgage rates in the second half of 2024.
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