The Economic Impact of COVID-19 on the HVAC Industry (So Far)
Apr. 29, 2021
After a year of following a world-altering pandemic, the HVAC industry is among many to see substantial changes in the wake of COVID-19. Looking to the future, you may be wondering what’s in store for the industry and the true economic impact of it all. Given our tight relationships with HVAC customers and major HVAC industry associations, we continue to see a common theme: while 2020 was a year of difficulties, the coming year looks brighter as backlog increases and spending stabilizes. Here we’ll go over the trends that developed over the past year and what you can expect to see as 2021 unfolds.
A Challenging Year for HVAC
The pandemic was disruptive for nearly every industry, and HVAC was no exception. The beginning of the year saw the greatest hardships for nonresidential construction, according to data from Associated Builders and Contractors (ABC).
In the first quarter of 2020 alone, the U.S. economy dipped 4.8% as a result of the pandemic, a reflection of just how devastating the last three weeks of March were.
That month, Air Conditioning Contractors of America (ACCA) conducted a survey to gain insight into how HVAC professionals felt about the future of the market amid the outbreak. A majority of those surveyed (70%) believed that the medical implications of the pandemic would last for a mere three months, while 65% anticipated long-term impact on business viability, and 9% worried that their businesses might not survive.
To help keep their businesses afloat, many HVAC contractors and other professionals took steps to mitigate the spread of the infection while staying in business. New procedures included implementing work-from-home policies and conducting more office cleanings, along with the cancellation of large events, and using masks and hand sanitizer both in the office and at customer locations.
Some contractors offered video consultations, a practice that had already been implemented by certain businesses pre-pandemic, but was now a necessity. In addition, technicians visiting on site regularly washed their hands, wore masks, and kept proper social distance as part of their comprehensive safety measures.
Now, contractors rely on cloud-based technology so their team can still access everything while working out of their homes. Being able to use forms (like those built right into the BuildOps platform) and capturing photo and video images that can be provided to customers without them ever having to be on site was a rare blessing as most contractors were using on-premise systems that caused chaos when they could no longer be in the office to access that data.
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Struggles Continue to Plague the HVAC Industry
In July, HVACInformed.com asked a group of experts about the impacts of COVID-19 on the market. Experts agreed that the overall impact was felt across the industry. With medical facilities requiring clean, fresh air more than ever, the demand for HVAC equipment surged. Unfortunately, disrupted supply chains made it necessary for contractors to rethink their global supply networks, while the coronavirus itself forced businesses to consider ways to keep both staff and customers safe.
Some experts stated that April was the hardest month for the HVAC industry, as HARDI data found that the average distributor saw a 19% decline in sales between April 2020 and April 2019. Although sales began to increase again in the summer, the unemployment rate was slated to continue negatively impacting the industry, as fewer businesses would be willing to spend on HVAC, especially with so many businesses forced to shut down.
What Might the Future Hold?
In addition to HVAC and other service-related trades, construction was also hit hard by the pandemic. One American Institute of Architects (AIA) survey conducted in September 2020 found that construction activity was expected to decline throughout the year and into 2021.
In the process, it was expected that construction activities pertaining to hotels would decline by more than 20%, while there would be a decline of 13% in recreational and amusement establishments, 11% in offices, 8% in retail, and 7% in education.
Although the effects of the pandemic are likely to continue throughout the next year, the economy has begun to grow as the U.S. digs its way out of a severe economic slump. For the HVAC industry that means an ongoing emphasis on public safety, environmental safety, and remote work.
With more people being vaccinated and businesses opening back up, customers will be more willing to spend on HVAC projects, creating more jobs and allowing technicians to complete the required installations or repairs. Technicians are also likely to be more comfortable entering customers’ homes and businesses, and struggling businesses will be able to hire more staff to keep up with increasing demand.
In an effort to keep people consistently healthy, people will also continue to recognize the health benefits of clean, fresh air in homes and workspaces that HVAC equipment facilitates. As a result, the HVAC industry can be instrumental in helping create a safe and consistently healthy environment for homeowners and workers in a post-COVID world. As supply chains return to normal and the demand for HVAC services continues to rise, professionals in the industry will be more likely to flourish with the return to a kind of normality.
Remaining Optimistic About the Future of HVAC
Ultimately, the future of the HVAC industry looks bright as demand continues to skyrocket and the economy climbs out of the recession. The increased prevalence of the vaccine and less uncertainty around HVAC projects will help businesses succeed following an especially difficult year.
If these challenges resonate with you, BuildOps may be the solution. Using our all-in-one platform, contractors can effectively manage every aspect of their business on a single system, increasing productivity, revenue, and customer satisfaction.
To learn more about our solution and see it in action, schedule a demo to get started today.