Contracting Business has again surveyed a select list of commercial HVAC contractors, to solicit an analysis of their businesses, and gain insight into the overall commercial HVAC market across the country.
The majority of contractors who provided Contracting Business with commentaries on business conditions say they're pleased — if not outright ecstatic — over the current business environment, and see it continuing for at least the next three to five years.
Health care is reportedly providing many construction opportunities, as are school renovations, which are needed to repair faulty or non-existent IAQ systems.
Chuck Richter, senior vice president of service for ACCO Engineered Systems, Glendale, CA, reports activity in energy conservation, high-tech clean rooms, and laboratories.
Calvert-Jones Co., Inc., Alexandria, VA, installs plumbing and medical gas piping as an add-on service.
Other services reported by our survey respondents include process piping, sheet metal fabrication and installation, refrigeration, indoor air quality (IAQ), and energy performance contracting.
Roberta Adams, marketing and communications specialist for TDIndustries, Dallas, TX, reports TDI's non-HVAC areas of business now include plumbing, high-purity piping, facilities management, and fire and life safety.
Opportunity Abounds for Those Who Seek
Some of the industry's activity — such as that seen by A.O. Reed & Co., San Diego, CA — is piggy-backed on major infrastructure improvements. For example, the new stadium for the San Diego Padres is two years old, and still generating work around it.
"Downtown San Diego is off the chart with new building," says Adrian "Ed" Blum, general manager for service, who adds that the new construction has made downtown San Diego a more family-friendly environment.
Les Merton, president of Adrian L. Merton, Inc., Capitol Hts., MD, responds that the commercial HVAC market in the Washington, DC metro area is "steady."
It's still a jungle out there, however, when it comes to winning a project, as multiple issues come into play. Comfort Systems USA, Inc., Houston, TX, which is among those companies with a national service area, gets a sampling of competitive bidding and economic conditions in every region of the U.S.
"We believe current pricing competition will continue, and are subject to general economic activity, inflation, and capital discretionary spending," says Julie Shaeff, corporate controller.
Plan & Spec Most Common, Design/Build Preferred
Half of all survey respondents use the Plan-and-Spec delivery method, and 36% use the Design/Build approach, based on client preference. However, Design/Build remains the " preferred" method of delivery among 75% of all respondents.
"Design/Build work allows us to provide value-added service to our customers, thus creating long-term relationships," says Shaeff.
"Design/Build is based more on performance and relationships. It represents lower final costs to our customers, and is less adversarial, with fewer change orders," comments TDIndustries' Adams.
"With Design/Build, we can use systems, procedures and standards we have developed over time. We believe these will provide best value to clients," says Robert Krier, president, Hill Mechanical Group, Franklin Park, IL.
Louis Cantu, director of business development for Comprehensive Energy Services, Inc., Longwood, FL, says CES most often uses a "negotiated and design assist" method.
"It's relationship-based, and performance-driven, and leads to continued negotiated work in the future," says Cantu.
The accompanying table spotlights 40 of the leading entities in the U.S. commercial HVAC market.
Please note that all numbers and percentages were supplied by the responding companies.
If you'd like your company to be considered for participation in next year's survey, please contact Senior Editor Terry McIver at 216/931-9732 or e-mail tmciver@penton.com.
Insights from Industry Leaders"The current economic environment continues to be favorable compared to recent years, based on nonresidential construction trends, HVAC shipment data, and industry forecasts." "Healthcare and education appear to be healthy markets, lasting throughout the next 3 to 5 years." "We've found our corner, and have very little in-state competition. The market is good. Contract wording is still the biggest problem." "The San Diego market is booming. There are no people left in the union hall, and many workers (union and non-union) are here from other areas of the country. I see no let-up for at least 2 to 3 years." — "Now, more than ever, it's important to focus on strengths, and differentiate yourself in the marketplace to bring real value to your clients. Our people are our greatest asset." "In our area, work moves from hotel/motel to retail, to government, to office buildings, to hospitals. Currently, hospitals are high on the list." "Work is picking up, as ventilation installs continue to cost less 'first cost' than chiller/boiler systems. Service remains strong, as capital budgets tighten up. School remodeling work for energy savings/IAQ has been strong. Many schools have never had proper ventilation and/or air conditioning." |
CB TOP 40 Industry Leaders | ||||||
| Company Name | Annual HVAC $ Volume (In Milllions) | No. of HVAC Employees | Percentage of HVAC Work | Service Area | ||
| New Construction | Retrofit/ | Service | ||||
| 1 EMCOR Group, Inc.* Norwalk, CT | $1,726 | 7,272 | 65% | 25% | 10% | Nationwide |
| 2 Comfort Systems USA* Houston, TX | $900 | 5,955 | 56% | 29% | 15% | Nationwide |
| 3 ACCO Engineered Systems Glendale, CA | $400 | 1,800 | 65% | 15% | 20% | NR |
4 Southland Industries | $281 | 1,400 | 58% | 28% | 7% | Nationwide |
5 TDIndustries | $180 | 900 | 40% | 30% | 30% | TX, AZ |
6 Hill Mechanical Group | $145 | 980 | 59% | 32% | 9% | Northeastern IL |
| 7 Brandt Engineering TX Dallas | $140 | 900 | 50% | 30% | 20% | TX |
| 8 Ivey Mechanical Company Kosciusko, MS | $135 | 1,000 | 75% | 15% | 10% | Southeastern US |
9 Coastal Mechanical Svc., LLC | $133 | 956 | 52.5% | 14.5% | 33% | Southeastern US |
| 10 MacDonald-Miller Facility Solutions Seattle, WA | $106 | 510 | 50% | 32% | 18% | WA, OR |
| 11 John W. Danforth Company Tonawanda, NY | $100 | 300 | 60% | 30% | 10% | Western NY |
12 A.O. Reed & Company | $95 | 525 | 63% | 24% | 13% | Southern CA |
| 13 Frank E. Irish, Inc. Indianapolis, IN | $80 | 300 | 70% | 20% | 10% | Central IN |
| 14 Way Holding, Ltd. Houston, TX | $58 | 285 | 74% | 12% | 14% | TX |
| T15 Egan Mechanical Contractors Brooklyn Park, MN | $50 | 125 | 65% | 35% | 15% | MN |
T15 Entech Sales & Service | $50 | 230 | 5% | 35% | 60% | Nationwide |
| 17 Hill York Corporation Ft. Lauderdale, FL | $44 | 450 | 95% | 5% | 0% | Southern FL |
| T18 Calvert-Jones Co., Inc. Alexandria, VA | $40 | 240 | 46% | 39% | 15% | Metro Washington, DC |
| T18 Mechanical Services, Inc. of Central Florida Orlando, FL | $40 | 300 | 30% | 30% | 40% | North/Central FL |
| 20 Johnson & Jordan, Inc. Scarborough, ME | $37 | 240 | 81% | 15% | 4% | ME/200 mile radius |
| 21 Delcard Associates, Inc. New Castle, DE | $36 | 200 | 60% | 33% | 7% | DE, MD, PA, NJ |
22 Yale Mechanical | $35 | 135 | 25% | 50% | 25% | MN |
| 23 Engineering Excellence Cincinnati, OH | $31 | 185 | 0% | 25% | 75% | Midwestern U.S. |
| T24 Lochridge-Priest, Inc. Waco, TX | $30 | 250 | 60% | 24% | 16% | Central TX |
| T24 Wiegmann Associates St. Charles, MO | $30 | 100 | 30% | 60% | 10% | Nationwide |
| 26 L.H. Cranston & Sons, Inc. Timonium, MD | $27 | 75 | 60% | 24% | 15% | Baltimore, Washington, DC |
| 27 Adrian L. Merton, Inc. Capitol Hts., MD | $26 | 130 | 40% | 50% | 10% | Metro Washington, DC |
| T28 Comprehensive Energy Svcs. Longwood, FL | $23 | 160 | 25% | 50% | 25% | FL |
| T28 Waldrop Heating/AC, Inc. Spartanburg, SC | $23 | 140 | 80% | 10% | 10% | SC, NC, GA,TN |
| 30 Comfort Engineers, Inc. Durham, NC | $22.7 | 150 | 30% | 40% | 30% | Durham, Chapel Hill, NC |
| 31 Alaka'I Mechanical Corporation Honolulu, HI | $22.5 | 83 | 50% | 40% | 10% | HI |
| 32 Streimer Sheet Metal Works, Inc. Portland, OR | $22.3 | NR | 85% | 10% | 5% | OR, WA, ID, CA |
| 33 The Superior Group, Inc. Anchorage, AK | $22.2 | 65 | 60% | 25% | 15% | AK |
| 34 United Team Mechanical Kaysville, UT | $22 | 145 | 80% | 15% | 5% | NR |
| 35 McCauley Mechanical Construction, Inc. Bridgeview, IL | $20 | 80 | 35% | 60% | 5% | Chicago, IL |
| 36 Gillette Air Conditioning Co.,Inc. San Antonio, TX | $17 | 140 | 95% | 5% | 0% | Southern Texas |
| T37 Champion Industrial Contractors Modesto, CA | $16 | 100 | 40% | 40% | 20% | Central Valley, CA |
| T37 Cottage Sheet Metal, LLC Chicago Ridge, IL | $16 | 50 | 90% | NR | NR | Chicago, IL |
39 Harold G. Butzer Co. | $15 | 90 | NR | NR | NR | NR |
40 Carwile Mechanical Contractors Cookeville, TN | $13.5 | 114 | 65% | 20% | 15% | Central TN |
| * Represents numerous locations nationwide NR = Not Reported | ||||||
