An Industry Forever Changing

June 1, 2003
by Eddie Hollub I remember how excited I was when I entered this industry in 1972 as a journeyman plumber. A lot has changed since then, and I can tell

by Eddie Hollub

I remember how excited I was when I entered this industry in 1972 as a journeyman plumber. A lot has changed since then, and I can tell you more change is coming. But so are opportunities,which continue to make the HVAC industry a very exciting place to be.

Here’s a short list of what we see happening out there.

Rising Insurance Costs

PHCC members recently ranked rising insurance costs as the biggest issue they face. We’ve heard horror stories such as liability insurance premiums increasing up to 600%, health insurance premiums soaring to all-time highs, and contractors being told they don’t qualify for insurance at all.

Finding affordable health insurance is also disturbing, especially when you consider that small businesses pay nearly 30% to 50% more than large businesses to cover the insurance costs of employees.

Indoor Air Quality

Mold and related indoor air quality (IAQ) issues are also of concern. In fact, sometimes the risks associated with these are convincing some contractors not to pursue work on some projects. Members who do HVAC work are becoming educated on the subject of mold, and are considering, or have implemented, protective measures for their companies.

Business Expansion

PHCC members are often extremely flexible when needed — readily adapting their business to changing times or market demands. In these situations, they typically seize an opportunity to improve profits by diversifying or adding to their business mix.

Here’s what’s happening :

  • Plumbing companies moving into the HVAC business
  • HVAC companies adding plumbing to their service offerings
  • Contractors adding specialty services to their businesses. Some examples include irrigation, lawn fertilization, water softeners, bottled water, geothermal market, water well drilling
  • Business scope changes — Large residential new construction contractors change to primarily commercial
  • Single-family home contractors beginning to do multi-family condos
  • Service and repair contractors entering the single-family market
  • Single-family specialists moving into multi-family construction
  • Radiant work is becoming more marketable in upscale homes, particularly in the Northeast. It’s used in just under 25% of homes in Canada, and the trend is moving south.

Available, Qualified Workforce

The industry continues suffering from an acute technican shortage. Federal statistics show that less than 10% of U.S. construction workers are involved in a federally approved apprenticeship program. This must change.

New Construction Trends

The PHCC Construction Contractors’ Alliance, reports the following issues:

  • National builder consolidation is changing the relationships between the builder and contractor
  • Changes in bidding processes are occurring in several markets
  • Competition from out-of-state contractors is occurring in several states
  • Risk allocation concerns are mounting.

Signatory Trends

The PHCC Union-Affiliated Contractors, considers these union trends as very important to its membership:

  • Through a partnership of the UA, UAC and MCAA, there is an effort to encourage local contractor chapters to become affiliated with the national associations
  • The UA is working to regain market share, including residential service
  • STAR certification and training continue to be top priorities to reach the UA’s goal of providing the highest qualified workforce in the industry
  • The UA’s distance learning programs provide some of the most innovative training available in the industry.

Changes Are Good For Industry

To me, all the industry changes going on these days are good for the industry as a whole. It certainly is keeping us on our toes.

We all know that we must anticipate and deal with change to succeed. That’s what this business is about, and that’s what makes it exciting.

Eddie Hollub is the 2003 president of the Plumbing-Heating-Cooling Contractors—National Association (PHCC) as well as president and co-owner of Modern Plumbing Co. in Pasadena, TX. The native Texan began his career in 1972 and has served at PHCC on all the local, state and national levels since 1986. He served as president of PHCC Texas from 1992-93. He can be reached via e-mail at [email protected].