Phc News – Features: April 2013: State of the Contractor
News, Products and Information for Plumbing and Mechanical Contractors
Phc News – Features: April 2013

State of the Contractor

By Jim Schneider

To get a pulse on the state of business and the industry for plumbing and hydronic contractors, Phc News surveyed a cross section of contractors and contracting firms all across the U.S. The results reflect the experiences of contractors of every size and from every geographic region. There are billion-dollar firms, as well as mom-and-pop operations working out of their trucks. Each has something to say about the general state of our industry and serves as an indicator of where things are going.

In examining the results of the survey, the overall sense of things is overwhelmingly positive. More than 80 percent of the contractors polled have seen their revenue increase from 2011 to 2012. Some of the increases have been pretty substantial. More than half of the companies we surveyed have added employees in the past year.

That is not to say that everything is all wine and roses. There are still plenty of challenges being faced by contractors around the country. While nearly every respondent acknowledged that the economy has improved, the slow recovery does still impact business for many. Some indicated less stability in their workload, with one describing the environment today as “a roller coaster economy.” The jobs are there, but for many, they are less steady and reliable.

Materials and pricing were also on the minds of many of the contractors surveyed. Rising costs and tighter budgets often put contractors in a squeeze. One described facing “tighter bids and less profit.”

Another said, “market pricing is too aggressive and margins have suffered terribly.”

In spite of challenges like this, nearly all those who responded to the survey believe that 2012 was better than 2011 and that 2013 looks to be better still. The recovery appears to be picking up steam, and the majority of those polled are preparing for still more growth in the year ahead. The economic downturn hit the industry hard, but has resulted in leaner operations and increased efficiency.

In describing the past few years, one contractor noted, “We have experienced lower levels of profitability, but remain focused on efficient execution and cost discipline.”

If there is an upside to tough economic conditions, it’s that businesses often find a way to weather them and move into better times with improved operations and capabilities.

We also asked contractors to share what they see as the keys to their success. An overwhelming majority of those surveyed told us that their employees are the single greatest reason their businesses succeed, grow and thrive. People are the face and lifeblood of any company. As a result, the firms dedicated to hiring and maintaining the best people very often experience the most positive bottom-line outcomes.

One contractor responded, “The most important key to success is transforming our team members from individual contributors into managers and finally, leaders.”

Another said the key to success is, “Quality people and products, in that order.”

The other main component to success noted by many respondents is customer relationships and service. In many ways, this intertwines with a focus on training and maintaining good staff. As one contractor put it, “We always answer the phone, we do what we say we are going to do, and we surround ourselves with the best people.”

Another said, “Reputation, integrity and honesty are the keys to success.”

According to many of the contractors surveyed, creating and maintaining good customer relationships are vital to growth. This brings repeat business, good word-of-mouth and establishes a quality reputation for any company.

Other important factors discussed included running an efficient and lean operation, remaining flexible to market fluctuations, and keeping up with the latest technology, such as BIM. Several contractors are also expanding their brands through the web and social media.

Phc News would like to thank those who took the time to respond to our survey. The data is encouraging and many signs point to increased growth and a positive uptick in 2013. We look forward to sharing still more good news next year in our 2014 State of the Contractor report.

Download a copy of the survey by clicking here.

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