HVAC and Plumbing Contractors

The annual revenues of the utility contractor industry in the US are more than $90 billion. This highly fragmented industry includes around 50,000 mostly privately held companies that operate from a single location, and have annual sales under $2 million each. Companies that work mainly in the residential market are usually small businesses, while large companies, including EMCOR Group and Comfort Systems USA, work mainly in the commercial field. Top plumbing companies include Roto-Rooter (owned by Chemed) and Rescue Rooter (owned by American Residential Services). Many plumbing contractors are franchisees.

COMPETITIVE LANDSCAPE

Demand for services depends partly on new residential and commercial construction. Demand for maintenance and repair work on existing structures is also substantial. Larger companies may have a competitive advantage winning large projects that require design work and installation, and can provide services to corporations in several markets. Large companies operate through semi-autonomous local units. Small companies can benefit from referrals and service. Profitability depends on the volume of work a company can acquire, since most costs are fixed. The industry is labor-intensive; average annual revenue per worker is $125,000

PRODUCTS, OPERATIONS & TECHNOLOGY

HVAC contractors install and service furnaces, air conditioning (AC) units, and refrigeration systems, and the associated ductwork, pumps, and control units in residential and commercial buildings. Some shops fabricate their own sheet-metal ductwork. Technicians are trained on installation and repair but often specialize in one or the other.

Plumbing contractors install bathroom ...