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New Building Boosts Home-Services Sector

The home services sector is benefiting from the growth in new construction, with increased investment and opportunities for contractors. Plumbing, electrical, and HVAC industries are experiencing steady growth. Energy-efficient solutions and green technologies are becoming more popular. Advertising strategies include highlighting cost savings and eco-friendly options, while new media strategies focus on generating customer reviews and providing convenient appointment reminders.

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New Building Boosts Home-Services Sector

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  1. New Building Boosts Home-Services Sector • Home-services contractors rely, in part, on new construction. A good sign for them was Dodge’s Momentum Index of 153.9 for December 2017, an increase of 3.6% from November 2017; it averaged 132.3 for the year, an increase of 10.7% from 2016. • From January to November 2017, $1.14 trillion was spent on construction, a 4.2% increase from the same 2016 period. Private construction spending has increased year over year since 2012, while public spending has remained flat. • For 2018, single-family residential construction is expected to increase 9%, while multi-family residential is expected to decrease 1%. Non-residential building is forecasted to increase 6%, led by educational and public buildings.

  2. Plumbing Business Flowing Well • According to IBISWorld, the plumbing industry generated revenues of $102 billion, as of October 2017, from 116,990 companies. Although it is a mature industry, it is expected to increase at a faster rate than the overall economy, or 3.5% annually. • Industry experts expect the residential plumbing market to increase 4% during 2018 and hydronics to increase 2%. Commercial hydronics is expected to increase 4%. • More plumbing firms are diversifying and offering HVAC services. Underfloor hydronic heating and cooling systems are becoming more common, especially in higher-priced homes. The industry is also expecting to benefit from government infrastructure spending.

  3. Electrical Contractors’ Business Is Sparking • According to Construction World’s 2018 Electrical Contracting Industry Outlook, most contracting firms were considered small, with 72% having 1 to 9 employees and 68% with annual revenues of less than $1 million. • Electrical contractors in all revenue categories expect to increase prices more than the construction industry in general. • Smaller electrical contracting firms ($0–10 million in annual revenue) plan to increase their revenues by doing more work in-house instead of hiring subcontractors. Almost 75% of larger firms, $25–$50 million in revenue, plan to invest in more IT.

  4. HVAC Is a Comfortable Market • The air conditioning systems market in North America (the biggest market worldwide) is expected to reach almost $60 billion by 2026. • The residential market is expected to outpace the commercial market through 2021, particularly replacement of existing units, although new construction will also contribute. Southern states account for 40% of total sales of HVAC equipment. • Trends include installing more energy-efficient products, upgrading in-office technology for more efficient operations and focusing on generating positive customer reviews.

  5. Future Insights • Energy service agreements (ESAs) are becoming more popular. Large companies or institutions can replace old or broken air handlers, boilers and other expensive HVAC equipment by paying monthly for equipment owned by an outside company. • Persistence Marketing Research predicts that tankless water heater sales will increase at least 5% annually worldwide, with the largest increase in North America. • According to GTM Research, during the past 10 years, solar has increased 68% annually. Green technologies are receiving more bank financing than previously. Energy-efficient HVAC systems and water-saving toilets will become more common.

  6. Advertising Strategies • Highlight energy-efficient HVAC and lighting solutions and the money customers can save. • Plumbers can use healthy living and eco-conscious trends to sell water purification systems and faucets that save water. • If your company has good reviews and/or video testimonials, then use them in your advertising as social proof.

  7. New Media Strategies • Use a service, such as Real Time Reviews, to generate Facebook and Google customer reviews when your technician is onsite. • Send automated emails to remind customers about scheduled maintenance and offer a discount if scheduled within a limited time. • Send a text confirming the appointment and include a photo of the technician, so the customer knows who to expect. The technician then sends another text when he or she is 10 to 15 minutes from arrival.

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