Plumbing & HVAC Contractors
Companies in this industry install and service plumbing, heating, and air-conditioning equipment. Major companies include ARS/Rescue Rooter, Comfort Systems USA, EMCOR Group, and TDIndustries.
Global demand for plumbing and HVAC services is increasing as economies expand and middle-class consumers increase. Although other countries have been slower than the US to adopt central air-conditioning, many of the world's fastest-growing cities are located in warm climates. Growth in air-conditioning use in countries such as Brazil and India could be significant if economic expansion continues. Plumbing and HVAC contractors typically operate regionally, but some large companies are beginning to expand globally.
The US plumbing and HVAC contractors industry includes about 100,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $190 billion.
New technology for HVAC and plumbing applications are driving growth in the industry. Systems that connect HVAC, lighting, and security elements as well as tools to monitor energy use and efficiency are popular in residential and commercial installations. The growing use of voice-control devices like Amazon's Alexa or Google Home is also driving residential demand for newer HVAC systems. Smart tech is also driving plumbing demand with personalization of shower and toilet function key for home markets and water efficiency for toilets and faucets important to larger installations. Some smart fixtures can also diagnose problems and alert for needed maintenance. Contractors experienced in new technology can benefit from new construction and remodeling demand as well as maintenance work.
Profitability depends on the volume of work a company can acquire, since most costs are fixed. Accounts receivable tend to be high, so a high volume of work also helps assure a steady stream of payments. Larger companies may have a competitive advantage in winning projects that require both design work and installation and in serving businesses with facilities in multiple markets. Small companies can compete by specializing in individual markets and by focusing on customer service.
Most companies in the industry are small: about 60% of US plumbing and HVAC contractors have fewer than five employees. Along with other trades, plumbing and HVAC contractors often have difficulty finding qualified workers.
Specialization - More residential and commercial customers are demanding personalization and efficiency options from HVAC and plumbing systems. Contractors able to offer specialized services to meet those needs should be able to win business.
Apprenticeships - Given the long-term shortage of skilled labor, companies able to offer training and apprenticeship programs will be able to recruit and retain more workers.
Products, Operations & Technology
HVAC contractors install and service furnaces, air conditioning (AC) units, and refrigeration systems, and the associated ductwork, pumps, and control
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms