It’s almost summer, so things outside are hot, hot, hot—and cold inside our buildings.
This time of the year is a booming industry for HVAC contractors, so I wanted to highlight this growing industry for our monthly industry report.
Overall industry outlook
As IBISWorld points out, the HVAC contractor industry is growing steadily, and there no companies that hold major market share:
What’s mainly driving this industry?
- Housing starts – increased residential construction (houses, apartment buildings, etc.)
- Private spending on home improvements – includes improvements made by both homeowners and property managers of residential properties
- Value of private nonresidential construction – increased investments in new construction and renovation
- Per capita disposable income – as the per capita disposable income has increased for consumers, they’re expected to spend more on upgrades and installations
- Oil and natural gas price index – if the oil and gas industry declines, the HVAC contractor industry might be negatively affected
The construction market has a major influence on this industry in particular. Since construction activity expanded and is expected to continue to expand, the HVAC contracting industry is anticipated to grow as well at 4.9% per year.
Major markets for HVAC contractors
Single-family, residential spending (both housing starts and private spending on home improvements) is #1, with manufacturing and industrial buildings (nonresidential construction) falling in second.
What are some key factors for success?
IBISWorld identifies the top 4 key factors for HVAC contractors to be successful as:
- Having a good reputation – since the industry competition is high and expected to increase, having a good reputation is of the utmost importance
- Management of seasonal production – having a successful workflow that isn’t affected by seasonal changes
- Ability to compete on tender – the ability to compete for and maintain contracts
- Ability to quickly adopt new technology – companies must stay on top of new technology to maintain a competitive advantage
Questions or comments? Please contact Michelle Philippon at mphilippon@teamCOACT.com