Renewed residential construction markets will heighten demand for plumbers
Los Angeles, CA (PRWEB) April 09, 2012
From unclogging household drains to installing high-pressure industrial steam pipes, the Plumbing industry touches the day-to-day lives of all Americans. Contractors in the industry hold specific licenses and qualifications to install, service and repair all types of pipes and drainage systems (e.g. faucets, ovens and toilets) for the catchment and distribution of water, liquids, gases and waste products. From 2007 to 2012, industry revenue is expected to decrease at an average annual rate of 3.4% to $67.3 billion. The sharp contraction in residential construction spending negatively affected industry performance because fewer homes and residential buildings meant fewer installations of fixtures, pipes and other plumbing, according to IBISWorld industry analyst Andrea Alegria. The decrease in demand for industry services was exacerbated by the recession-induced slump in non-residential construction activity. A decline in new office buildings, retail shops and other commercial spaces, and high vacancy rates in existing spaces as a result of bankruptcies and branch closures, also reduced demand for plumbing contractors. Demand for retrofitting services was also hurt as consumer spending declined and people cancelled or postponed plans to upgrade existing plumbing equipment.
During the difficult market, the number of plumbing contractors and the people employed by them also declined. With limited work, contractors in the Plumbing industry increasingly lowered prices for services to compete on price, putting pressure on profit, Alegria said. Contractors also looked for ways to reduce costs, reducing workforces. Many contractors, unable to compete, exited the business. In the five years to 2012, contractors are estimated to decline an average of 1.4% annually to 98,777 enterprises, while jobs will decline at an average annual rate of 1.4% to 469,988.
The industry has a particularly low concentration of ownership. The industry is characterized by its many small-scale establishments competing for a share of narrow regional markets. The four largest players - EMCOR Group Inc., Roto-Rooter, TDIndustries Ltd. and ACCO Engineered Systems - are estimated to contribute a small fraction of annual industry revenue. After four years of declining revenue, the industry is projected to grow 4.0% in 2012 due to an increase in consumer spending and rising demand from residential construction markets. In the next five years, downstream construction markets will continue to recover. Solid growth in maintenance and repair activities will also support demand. For more information, visit IBISWorld’s Plumbing report in the US industry page.
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IBISWorld industry Report Key Topics
Industry contractors install and maintain plumbing fixtures, fittings, and equipment, ranging from work on household pipes and drains, to installation of gas cooking and heating appliances, bathroom and toilet fixtures and venting systems. Emergency repair work (e.g. unclogging drains or repairing burst water mains), represents a significant source of industry revenue. Contractors may also supply plumbing appliances, pipes and coupling products for projects.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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