Industry Analysis & Industry Trends
Though revenue from new installations slowed during the recession when construction levels fell, steady demand for maintenance and repair services kept the Heating and Air Conditioning industry running. As the real estate market improves, so too will industry demand. Government initiatives to reduce energy consumption will promote installations of newer, more energy-efficient units. However, competition from operators in outside industries such as electricians and manufacturers will constrain growth... purchase to read more
Industry Report - Industry Investment Chapter
The Heating and Air Conditioning industry, like other service industries, has a low level of capital intensity. For every $1.00 spent on wages, the average HVAC operator is expected to spend about $0.03 in capital investment in 2013. Wages are the primary expense for contractors; little to no heavy equipment is used in the installation and maintenance of heating, air conditioning and refrigeration systems, and purchase costs are mostly limited to job-specific materials. IBISWorld estimates that depreciation expenses only account for about 0.9% of revenue in 2013, whereas wage costs, including subcontractor labor, make up 50.1%.
Capital intensity has remained largely unchanged during the past five years... purchase to read more