The plumbing Industry is expected to see a significant slowdown after many years of rapid growth in Murrieta, Temecula, and the Greater Inland Empire. It all came from rising mortgage rates, sluggish residential home building, and ongoing labor shortages. Another concern is the education, know-how, and latest equipment required for plumbing experts to remain at the forefront for many years. Meantime, the emergence of smart technologies and appliances and rising environmental insights are also affecting customer expectations.
The Response To Covid Had A Significant Effect On The Plumbing Industry
The reaction to Covid had various effects on the plumbing sector, some of which still have an impact. This is true of other construction products and home improvement companies as well. However, the plumbing sector is also moving forward in the rapidly changing digital world. Here are a few of the major trends that will affect consumers and tradespeople in 2023:
Instability In The Housing Market Between 2022 and 2023 Will Affect The Way The Plumbing Industry Does Business
According to IBISWorld, the plumbing sector in the U.S.A. was valued at around $134 billion at the halfway point in 2022, with about 130,300 enterprises active in the plumbing industry. In addition, the number of plumbers, steamfitters, and pipefitters was predicted to be around 469,900 by the U.S. Bureau of Labor Statistics for 2020. Plumbing companies have grown steadily over the last few years. Still, in 2022 we’re expected to witness a 0.1% fall in revenue as housing declines, the market flattens out, and construction material costs continue to rise across the board.
We Were Booming From Historically Low-Interest Rates
Mortgage rates are rising from the historically low levels experienced during the COVID-19 epidemic, which enhanced purchasing power for new homeowners. Homeownership increased along with home equity, so it raised the desire of owning a home and prompted a surge in housing. These three leading signs all indicate that the housing market in 2023 has less incentive for builders to continue development, resulting in a decreased need for plumbers and new construction.
Shortages of Labor and Materials Continue
It might not be the worst thing if the demand for skilled plumbers on new building projects declines. There is a chance that this will cause a positive re-calibration of our skilled trade professionals. This could arise due to the long-standing struggles with a severe labor shortage, the retirement of qualified plumbers, and the lack of enthusiasm for the plumbing industry among the younger generations. The labor crisis that affected all businesses in 2020 and 2021 impacted the plumbing sector particularly hard, and the agony hasn’t yet subsided.
We had a 55 percent deficit of plumbers who had the ability to work but didn’t, as reported by the National Association Of Home Builders (NAHB) in 2021. This made it challenging for contractors to staff projects. Additionally, due to the pandemic, everything linked to the final plumbing installation is more expensive. Raw materials were more difficult to acquire, not to mention, more expensive.
The Market for Plumbing Fixtures and Fittings is Expanding
The plumbing fixtures and fittings market had an estimated $22.40 billion in North America and $81.8 billion globally in 2020. According to global market research by ReportLinker, the latter ($81.8 Billion) is expected to develop at a compound annual growth rate (CAGR) of around 4.4 percent, reaching $106.4 billion by 2026. According to research conducted by Grandview Research, the North American market will expand at a faster than CAGR of 7.5 percent until 2028.
Online Stores Are Set To Profit The Most
Okther areas, such as big box stores, home centers, and other offline retailers, currently account for the largest portion of revenue. However, over 80 percent of the online portion is experiencing the fastest CAGR as consumers naturally tend to move toward the simplicity of purchasing products online through digital channels for the do-it-yourselfer and other home improvement projects.
Some Homeowners Are Putting Off Plumbing Purchases Or Repairs
One-third of homeowners that participated in The Farnsworth Group’s Healthy Home Study in 2021, which was in collaboration with Harvard’s Joint Center for Housing Studies, reported having outdated or damaged plumbing. This suggests a sizable opportunity for plumbing companies should they provide homeowners with affordable materials and installers ready to work.
Customers look for more environmentally friendly options
Environmental concerns, especially in California, take precedence. Water-saving fixtures and toilets are at the top of the list for most consumers. These fixtures also include sprinkler systems, fire sprinklers, and water treatment systems that all remain heavily influenced by environmental considerations.
Residents are becoming more conscious of how much water they use and looking for innovative methods to reduce their carbon impact while making their homes environmentally conscience. For this reason, we are seeing an increase in the demand for greywater recycling systems, which are inexpensive and simple to install. In addition, energy-efficient tankless water heaters have become the new desire for most homeowners. Additionally, the market for solar water heaters is expanding, with Grandview Research’s report predicting that through 2025, it will expand by around 8.1 percent in the United States.
Tankless Water Heaters Are Creating Their Own Demand
According to the Healthy Home Study published in 2021 by The Farnsworth Group in collaboration with Harvard’s Joint Center for Housing Studies, 31.6% of homeowners planned to install tankless water heaters to improve energy efficiency.
Smart Faucets and Fixtures Are On The Rise
Smart technology is starting to become more popular among American homeowners. Plumbing-wise, this encompasses anything from motion-activated faucets to smart leak detectors and toilets. These items aim to improve the quality of life for American families while reducing water and energy usage and guarding against problems like water damage.
For instance, the market for smart toilets is estimated to be worth $6.08 billion in 2018. By 2026, the industry has anticipated noticeabe growth of around ten percent, achieving $12.9 billion. In addition, 43.1 percent of homeowners reported a desire to own a smart toilet in the 2021 Healthy Home Study by The Farnsworth Group and the Joint Center for Housing Studies at Harvard. 48.2 percent of households who responded said they don’t already have automated faucets but would want to own one.
More Education And Training Among Plumbers Are Needed
Plumbing experts must be ready to expand their expertise to successfully help clients grasp developing product possibilities and integration of smart home technologies in light of eco-friendly and intelligent options. Furthermore, to guarantee that professional skills remain current and applicable in a changing market, leads to varying training and licensing standards as well as optional certifications.
Plumbing professionals will have access to more options and sources of income if they are willing to adjust to customer demands and new technologies, whether or not certificates become mandatory.
There Is A New Demand For Specialty Plumbing Tools In The Industry
Plumbing goods are just some of the ones that undergo innovation. Specialty tool and technology development are in progress. Smart technology makes it simpler and less intrusive for plumbing experts to find and remedy issues.
New Innovations Will Continue To Emerge
They can fix sewage lines using trenchless pipe technology, find leaks with infrared technology, or check drainage systems with high-definition cameras. Digital technologies also make it simpler to arrange and manage customer connections, as well as provide them with maintenance and assistance before problems arise. These kinds of innovations will continue to emerge in reaction to other market changes (and acceptance by real-world trade professionals). We must coordinate the efforts in this area to pique the interest of qualified workers in the plumbing profession.
New Plumbing Technologies Are Required For The Changing Industry
The ability to design and strategically price your construction goods while keeping up with market trends and planning for the future depends on having the correct data at your disposal. In keeping up with changing consumer needs, cutting-edge technology, and disruptive rivals, The Farnsworth Group will undertake specialized market research for the plumbing business in collaboration with you.