How Many PHC Contractors Are There?
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 contractors.”
Number of employer establishments: 92,572 (as of the latest revision dated Dec. 21, 2010).
Total revenues: $161.2 billion (rounded to one decimal).
Number of paid employees: 992,734.
Annual 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 volume.
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.