The Growth of U.S. HVAC Industry
Significant growth in the HVAC services market is expected on an international scale, but especially so in the U.S., according to market analytics firm Mordor Intelligence.
The U.S. population is constantly growing—generally increasing between 0.7 and 0.9 percent each year—feeding a constant demand for new housing. Between 2019 and 2029, the country is expected to see a 7 percent population increase, according to data from the U.S. Census Bureau. The steady increase in population alone is enough to boost demand for HVAC services, but according to finance experts, we are now on the precipice of “the biggest housing boom in history.” This is thanks to the Millennial generation (those born between 1981 and 1996) “finally growing up and buying houses,” Forbes contributor and editor of the RiskHedge report Stephen McBride stated.
The U.S. government is contributing to the projected growth in demand for HVAC services in a couple of ways. In 2017, it increased its budget allocations toward residential construction by 2 percent to $46.7 billion in to promote home ownership. Additionally, the U.S. Department of Energy has introduced new efficiency standards to mandate sustainable heating and cooling solutions, with the goal of reducing carbon emissions by about 60 million metric tons by 2030. This change in policy turns out to be a boon for the HVAC industry, as these specialized energy-efficient units will need to be manufactured and installed by HVAC contractors and companies.
Every construction project, from a two-bedroom house to a skyscraper apartment complex, will require the services that HVAC businesses offer. So, If you are considering joining the HVAC industry’s workforce or starting your own business, now may be the perfect time to do it. Perhaps you are a seasoned technician with a strong understanding of the nuts and bolts of the service side, dreaming of becoming your own boss. Or maybe you are a naturally business-minded entrepreneur looking for the right industry to invest your capital and management knowledge.
The appeal of starting a business has many benefits—making your own schedule, creating jobs within your community, building a legacy, and perhaps most intriguing, gaining financial independence. It’s difficult to pin down an average profit that a typical HVAC business-owner makes in the U.S., as it depends on the size of the business, the number of employees, and the number of clients it has. According to data from a survey performed by connecteam, the average HVAC business-owner takes home about $75,000 to $80,000 per year.
While starting an HVAC business can be a rewarding and lucrative venture, there are some realities to consider before making the commitment. Twenty percent of small businesses fail in their first year-and-a-half fail after five years in operation, according to the U.S. Bureau of Labor Statistics. The HVAC industry is not immune. There are many reasons for the failure of businesses, but the majority of them can be prevented with proper planning.
HVAC can be a lucrative business if done right. We talked to an expert that knows the keys to success and the pitfalls. Read on to learn more.