Plumbing and mechanical contracting firms we surveyed for this year’s Pipe Trades Giants list are becoming disheartened by the continuing recession - only 25 percent of respondents expect an increase in sales next year, compared to 2008 when 62 percent of respondents predicted a sales increase for 2009. Forty-seven percent say they do not have enough work to keep their employees busy. About 46 percent expect sales to decrease in 2010, and 28 percent expect to remain the same.
Yet profitability has increased for 28 percent of respondents and stayed the same for 35 percent.
These companies may be down, but they are not out of the game yet. They’ve made changes in their businesses to get the work they need now and to make them more competitive in the future. Some diversified into other areas such as green construction (solar), remodeling, building information modeling, design/build, sheet metal, electrical and government projects. Others expanded their service divisions and pre-fabrication capabilities.
Some consolidated their operations to make them more lean, while others acquired new companies or opened new locations to expand their market share. Many increased their marketing efforts to capture new customers. A few have bid for jobs out of their local area, some even out of state.
A good portion of respondents have used this slowing down of work to boost the skills of their employees through increased training - technical skills as well as leadership, management, time management, communication and problem-solving skills.
And most have examined the internal structure of their companies and found ways to trim expenses, control costs and streamline processes. Some have had to let people go; others have hired key personnel to help them focus on profitability.
Some are building relationships with builders and general contractors so they will be top-of-mind when residential and commercial construction begins again in their areas.
Green building continues to grow in the industry; almost 14 percent of respondents’ current business is from LEED or other sustainable construction projects. That’s up from almost 9 percent the year before. Thirty-eight percent belong to some type of green building professional group - GreenPlumbers USA, Green Mechanical Council, the U.S. Green Building Council, ABC Green Council and MCAA’s Green Contractors, as well as local sustainability groups.
While housing starts were down 33.3 percent last year, they rose 3.6 percent in June 2009 for an annual rate of 582,000, the highest level since November 2008. Some analysts believe this is a sign of the housing market’s increasing stability.
Increasing unemployment remains a concern, as this could lead to more home foreclosures in states with record unemployment figures, but we’ll concentrate on the positive news.