2019: A Good Year to Be a Better HVAC Contractor

MSCA Chair, Kip Bagley, along with other industry leaders, were interviewed by ACHR News regarding the year’s outlook for the HVAC industry.

By all accounts, 2018 was a great year as far as the U.S. economy was concerned. Sales of HVAC equipment remained strong, the unemployment rate stayed below 4 percent, and the gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter (4.2 percent in the second quarter).

But some analysts believe the economy may soften in 2019, as housing starts slow down, interest rates rise, and existing home sales decrease. This may mean fewer remodeling opportunities, or it could result in consumers deciding to stay put and investing in their current homes and businesses. That would be good news for HVAC contractors.

Many member companies of the Mechanical Service Contractors of America (MSCA) experienced year-over-year growth in 2018, said current chairman, Kip Bagley, vice president of service, Emcor Services Mesa Energy Systems, Irvine, California.

“Retrofit divisions have been among the highest increases year over year, followed by automation and service,” he said. “MSCA expects to see continued growth in 2019 when it comes to service offerings. I expect to see continued interest and increased sales in equipment and innovations that focus on energy efficiencies, such as VRF systems, chiller replacements, and drive projects, as well as solar and automation equipment installations and upgrades.”

Bagley expects commercial service and repair work to continue growing at the same pace as it has for the last several years.

“There are so many systems that are in various life cycle stages, so when organizations are faced with budget cuts or consolidation, they typically choose to service and repair their equipment instead of making a larger investment in a replacement,” he said. “We don’t see this changing for the foreseeable future.”

Looking ahead for the year, the skilled worker shortage will continue to be a challenge, forcing many business owners to turn down work because of lack of manpower. In addition, businesses continue to struggle with adapting to new technologies, which are always changing.

Not surprisingly, the labor shortage continues to be a concern for MSCA as well. Bagley noted that while this has been a big issue over the last few years, the next five to seven years may be even more of a challenge as baby boomers start retiring.

“The good news is that we are starting to see an increased interest in younger millennials (ages 17 to 23) joining the skilled trades, as well as those in their late 20s and 30s, who are struggling with college loan debt,” he said. “Both groups are finding out that our industry provides excellent compensation, benefits, and opportunities.”

Bagley believes that company culture has a lot to do with attracting and retaining employees. He noted that companies can be successful by having a highly collaborative environment, fostering constant communication, and being dedicated to the ongoing training of their technical workforce.

“We also encourage adopting proven technologies and innovations, which help attract the younger generations,” he said. “Finally, it helps to be a very sales-focused organization, so technicians are always busy and can count on a full 40-plus hour schedule, which is important to most in our industry. Any of these tactics can help contractors attract new employees.”

Read full theNEWS article here; https://www.achrnews.com/articles/140974-a-good-year-to-be-a-better-hvac-contractor?