Government data is imperfect but it will have to do.
I get asked that question a lot by industry market
researchers, and it’s not an easy one to answer.
The most comprehensive data covering
our industry gets compiled by the Census Bureau in an economic census taken
every five years; the most recent coming in 2007. Here are the broadest
statistics coming out of that census for NAICS code 238220, defined as “Plumbing, heating, and air-conditioning
of employer establishments: 92,572 (as of the latest
revision dated Dec. 21, 2010).
revenues: $161.2 billion (rounded to one decimal).
of paid employees: 992,734.
payroll: $45.87 billion.
You can find this information here .
From this data, we calculate that the
average PHC firm does $1.74 million in annual sales with an average of 10.7
employees who earn an average annual income of $46,206. Keep in mind this was
as of 2007.
One can quibble over how accurate these
numbers might be given that it is based on survey information volunteered by
business owners such as yourself. However, with tongue placed firmly in cheek,
I will assume you wouldn’t fib to your favorite federal government.
In any case, the 92,572 establishments
cited grossly understate the number engaged in PHC work because they include
only contractors reporting a payroll. The Census Bureau used to track a
separate category of sole proprietorships and partnerships but gave that up
after the 1987 Economic Census, citing the difficulty of obtaining accurate
information from so many tiny shops.
For what it’s worth, I did an analysis
of the 1987 Economic Census that was published in the April 1991 edition of PM. Back then, the Census Bureau tallied
69,566 PHC firms with a payroll and 92,012 sole proprietorships/partnerships.
As noted, the latter number is suspect. Nonetheless, for the sake of analysis
let’s suspend disbelief and use that 1987 data, and assume the sole
proprietor/partnership category grew at the same 33 percent pace that firms
with a payroll did between 1987-2007. That would mean around 122,000 PHC garage
shops were in business as of 2007, and in total upwards of 210,000 entities
were doing PHC work.
The government doesn’t organize its
data in a user-friendly way. But once you figure out its mysterious ways, you
can find breakdowns by construction specialization here.
This Web site counts 91,693 PHC
establishments as of August 2009 (prior to the revision issued last December).
Of those, 37,165 were identified as HVAC specialists, deriving more than half
of revenues from that type of work. That ratio seems about right, as does their
cumulative revenues of $56.7 billion, about 35 percent of the total category
But it’s hard to accept the tally of
only 37,276 plumbing contractors. It’s common knowledge there are far more
plumbing firms than HVAC specialists, probably around 2-to-1. Those uncounted
one-man shops no doubt include most of the missing plumbing contractors, while
others are subsumed under the other listed categories that include sprinkler
installers, mechanical contractors and “steam and piping fitting (sic) contractors.”
These categories hint at distinctions between residential and commercial work,
which I’m also asked about quite a bit.
More detailed information about market
sectors can be found here .
This URL teems
with breakdowns for various types of buildings and structures, although the
info is presented in piecemeal fashion and requires a lot of parsing before you
can make sense of it.
I’m also frequently asked about the
breakdown between construction and service work, and here, too, is where you
can find that data. The site includes breakdowns for
additions/alterations/reconstructions (i.e., remodeling), as well as
maintenance and repair work.
The Web site pegs the total value of
maintenance and repair work on single-family homes at $19.72 billion and for
multifamily apartments and condos at $2.46 billion. That comes out to $22.18
billion worth of residential service work, or about 13.8 percent of the $161.2
billion in revenues generated by PHC contractors. My gut feeling is that’s way
too low. It doesn’t account for all the residential service work performed by
the one-man shops the Census Bureau gave up trying to track.
Happy parsing, market researchers. I’d appreciate
hearing from you if anyone comes across any data that makes your eyes pop, for
better or worse.
How Many PHC Contractors Are There?
March 1, 2011