Los Angeles, CA (PRWEB) August 04, 2012
From unclogging household drains to installing high-pressure industrial steam pipes, the Plumbing industry benefits from widespread demand across residential and nonresidential building markets. 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. The industry's performance is directly linked to building construction markets and consumer spending levels; therefore, the total collapse of the housing market and subsequent economic recession significantly hindered growth over the past five years. “Although the industry benefits from steady demand for repairs, the industry's pool of customers was limited by the steep drop in new building construction,” says IBISWorld industry analyst Andrea Alegria. “At the same time, declining income lowered demand for plumbing renovations and upgrades to existing properties.” Consequently, industry revenue is expected to decline at an average annual rate of 4.9% to $61.4 billion in the five years to 2012.
As demand for Plumbing industry services weakened, operators increasingly lowered prices for services to compete on price, putting pressure on profit. “Contractors also looked for ways to cut costs, and implemented workforce reductions,” adds Alegria. “Many contractors, unable to compete, exited the business.” The industry is characterized by its many small scale establishments competing for a share of narrow regional markets. The fragmented structure indicates that more than three quarters of industry establishments employ fewer than 10 people, with about 55.0% employing fewer than five (excludes non-employer establishments). In the five years to 2012, plumbing contractors are estimated to decline at an average rate of 1.7% annually to 103,653 enterprises, while industry jobs are forecast to decline at a rate of 2.0% per year to 509,820 people.
After four years of declining revenue, the industry began recovering in 2011 and is projected to grow 2.7% in 2012 due to an increase in consumer spending and rising demand from residential construction markets. Strong recovery in the housing market and marked improvements in nonresidential building construction will continue to drive growth for the industry through 2017. Population growth, lower unemployment and improved income levels will boost demand for new housing, and strengthen demand for plumbing services for repair and renovation work. Across nonresidential markets, the prevalence of long-term plumbing maintenance contracts will also help drive revenue growth in the five years to 2017. For more information, visit IBISWorld’s Plumbing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.