HVAC contractor sentiment holds steady: Survey

EGIA this month released the results of its annual survey of HVAC contractors throughout the United States and Canada.

What’s happening: Research firm Decision Analyst conducted the study, with responses encompassing 353 owners, executives, and middle managers, nearly 90 percent of whom generate over half of revenues from residential work. 

The big picture: “Over the past year, revenue ‘steadiness’ has increased somewhat and growth has cooled slightly,” the report says. “While half reported growth, the number is down from 58 [percent] last year.” 

Highlights: 53 percent of respondents reported that their revenue increased over the past year. Within that share, 15 percent saw revenue grow less than five percent, while 20 percent reported revenue growth of more than 20 percent, and the rest were in between.  

• Yes, but: 20 percent of respondents said their revenue decreased. Of those, 17 percent said sales fell less than five percent, while 21 percent said they fell more than 20 percent — similarly, the rest were in between. 
• Respondents named finding and retaining employees as their top challenge, and lead generation as the number two challenge. 

Zoom out: As for the future, 39 percent of contractors said they were optimistic, while just five percent said they were pessimistic, with the rest neutral. 

• Asked about their plans for the next three years, more than a third of respondents (38 percent of middle managers and 42 percent of owners/executives) said they intend to expand their service areas.
• Only 26 percent of executives and 14 percent of middle managers said they plan to enter new verticals in the next three years, and even fewer — 16 percent of executives and six percent of middle managers — said they plan to sell. 

Of note: 63 percent of respondents have been approached by or explored private equity, with 54 percent saying they’ve been approached at least four times. Most contractors said they would rather sell their business to another HVAC company or to private equity than to family members. 

Go deeper: The report also dives into granular, operational details. EGIA members can access it for free; for non-members, it’s available for purchase.