7 Biggest HVAC Industry Trends Shaping Your Business in 2023
HVAC businesses are seeing another year of fast-paced technology advancements, labor shortages, and higher-than-ever consumer expectations.
In this article, we share the latest HVAC market trends and industry statistics to show you what obstacles and opportunities will affect your business in 2023.
HVAC market trends to watch:
HVAC industry revenue is growing
Customers are spending more on HVAC maintenance
HVAC businesses are short on skilled technicians
It’s harder to get HVAC materials and equipment
Customers are investing in new HVAC technology
More demand for sustainable HVAC systems
HVAC businesses are using software to automate work
1. HVAC industry revenue is growing
Overall, the HVAC market is trending in a great direction. These statistics show just how much the industry has changed and grown in the last two years:
- There are 118,000 HVAC businesses in the U.S. (IBIS World)
- The HVAC systems market was valued at $16.54 billion in 2021. (Grand View Research)
- Experts project the HVAC industry will grow at a rate of 5.6% from 2022 to 2030. (Grand View Research)
- The average annual revenue for small HVAC businesses is $162,505 per employee. (Jobber)
- At the end of 2021, HVAC businesses sent 10% more new quotes and scheduled 6% more new work than last year. (Jobber)
- The average invoice size for small HVAC businesses is $2,018. (Jobber)
- Successful HVAC contractors typically aim for a 12% net profit margin. (U.S. Department of Energy)
- The median cost of labor grew by 13% year over year in Q1 2022 compared to Q1 2021—the highest since the start of the pandemic. (Jobber)
As prices go up across the HVAC industry, you have the opportunity to charge more for services and to keep up with your competitors (or make even more). Figure out how much competitors charge, then communicate the price increase to customers.
2. Customers are spending more on HVAC maintenance
This year, more homeowners are looking for HVAC companies that can help with home improvement and building projects. Check out these HVAC industry statistics on customer spending:
- Americans spend over $10 billion every year on HVAC repair and maintenance services. (Grand View Research)
- Spending on construction and renovation projects grew 6% in 2022. (Harvard University)
- Average invoice sizes increased by 23% in 2022 thanks to growing project sizes and scopes. (Jobber)
- Duct and vent cleaning costs increased by 19.5%. (Thumbtack)
- More than 50% of U.S. homes are over 40 years old, making a strong market for HVAC system repairs and replacements. (ACHR News)
- Nearly 67% of U.S. homes have air conditioners. (Energy.gov)
- 51% of homeowners hired licensed tradespeople for home improvement projects in 2022. (iPropertyManagement)
You can take advantage of this growing demand for HVAC services by building relationships with home construction contractors. This will keep you top of mind when a new HVAC project comes up.
When you build HVAC service quotes for homeowners, add optional line items so you can offer to repair or install additional units in your client’s home.
3. HVAC businesses are short on skilled technicians
There’s been a shortage of skilled trades labor for years—but it affected more businesses than ever in 2022. Here’s how that shortage looks in the HVAC industry:
- 80,000 HVAC jobs are currently unfilled. (National Comfort Institute)
- In 2022, there will be 1.8 positions available for every technician working in the HVAC industry. (ACHR News)
- 68% of tradespeople struggled to hire skilled workers in 2021. (Staffing Industry Analysts)
- 27% of skilled trades workers are within 10 years of retirement age. (Staffing Industry Analysts)
- Only 36% of workers in the U.S. feel engaged and motivated in the workplace. (Gallup)
- In 2021, the average hourly earnings of nonsupervisory HVAC employees grew by 6.7%. (U.S. Bureau of Labor Statistics)
- Businesses that hired employees in 2022 grew by an average rate of 27% year-over-year. (Jobber)
4. It’s harder to get HVAC materials and equipment
These supply chain issues, material shortages, and cost trends are preventing business owners from getting the materials they need:
- 68% of building contractors reported shortages of HVAC equipment in May 2021. (National Association of Home Builders)
- Control boards are taking 16 to 20 weeks to ship. (ACHR News)
- U.S. shipments of residential gas storage water heaters decreased by 13% in 2022. (AHRI)
- Major HVAC parts manufacturers have raised prices between 3% and 20%. (Paschal)
- The average price of stainless steel jumped from $1.41 to $5 per pound from 2021 to 2022. (ACHR News)
- HVAC equipment that involves semiconductors could see price increases between 10 and 30%. (Raiven)
To keep your HVAC inventory stocked, work with multiple suppliers and pre-order as much equipment in advance as possible. When you have extra supplies around, you’ll be prepared and won’t have to turn down or delay work.
5. Customers are investing in new HVAC technology
More and more customers are looking for newer HVAC technology that can improve energy efficiency and save them money. Take note of these HVAC technology trends:
- 24% of U.S. households owned a smart thermostat in 2022. (Consumer Technology Association)
- Smart thermostat users save an average of $49 per month. (Parks Associates)
- 8 out of 10 homeowners who own smart thermostats plan to buy another one in the future. (Statista)
- Ductless HVAC systems could represent 15% of all industry revenue in the next 5 years. (Aeroseal)
- The inverter heat pump category could grow at a rate of 12.5% over the next six years. (Million Insights)
- Variable speed heat pumps can trim a homeowner’s monthly costs by up to 40%. (Mordor Intelligence)
Which of these newer HVAC solutions can you offer your customers? See what your competitors are offering and add this new technology to your HVAC business plan.
READ MORE: 23 best HVAC blogs, news sites, and forums
6. More demand for sustainable HVAC systems
As property owners spend more on energy to combat extreme temperatures, many are concerned about the environmental impact of their HVAC systems. Look to these sustainability trends to see how your business can adapt:
- By 2023, all newly sold residential central A/C and heat pump systems will have to meet new U.S. energy efficiency standards. (U.S. Energy Information Administration)
- Residential heating and cooling accounts for 9% of total energy use in the U.S. (Project Drawdown)
- Air conditioning unit shipments peaked at 6.28 million total shipments in 2021. (Jobber)
- Experts expect an 8% increase in summer air conditioning demand in the U.S. (AGU)
- Over 50% of HVAC customers are willing to pay more for more expensive, eco-friendly products. (GWI)
- Homes in the U.S. have been spending 20% more each year on climate control since 2016. (iPropertyManagement)
With new government regulations to reduce energy consumption and carbon emissions, The demand for sustainable HVAC systems will only grow.
Make sustainable air conditioning, heating, and ventilation systems part of your service offerings. You and your team should keep up with energy efficiency trends—and educate your customers on how to minimize energy consumption.
7. HVAC businesses are using software to automate work
HVAC businesses of all sizes are using HVAC apps and software to run their businesses more efficiently. See how and why these tools are shaping the industry in 2023:
- 61% of small businesses experience faster and easier scheduling using scheduling software. (SoftwareAdvice)
- 46% of HVAC business owners said they’re taking advantage of online booking, compared to only 38% of business owners in other industries. (Jobber)
- Businesses that offer online booking options received 24% more customer calls. (Yocale)
- 39% of skilled trades businesses added new tools for quotes in 2021. (McKinsey & Company)
- 45% of HVAC workers say they prefer texting instead of emails to communicate. (SlickText)
- 90% of people read text messages within three minutes of receipt. (Gartner)
- 82% of Americans used online payments in 2021, compared to 72% in 2016. (McKinsey & Company)
In 2023, you can expect that more HVAC businesses in your market will use software to manage jobs and client relationships.
Explore HVAC software that helps you meet customer demands for better communication, scheduling, booking, and payment methods.