2016 Western Trends Survey: Plumbing contractors describe business in 2016
The streak for plumbing contractors may be slowly coming to an end. Last year’s RJ Western Trends Survey was the third year in a row responding contractors painted an optimistic picture of the year just past. This year some of the optimism has been throttled back, as a few of our categories have posted slight downturns compared to last year’s results.
The mean age of respondents has again risen, perhaps echoing the continued graying of the industry-at-large. [Of course, younger plumbers may still be at the point in their careers at which titles like Owner/Partner, Manager or President/Officer — the titles from which the lion’s share of responses come from — are still in the future.—Ed.] Respondents’ mean age in last year's survey was 55. This year it’s 58 years old. Females represented 2% of this year’s respondents, compared to the 7% last year and 10 percent from the 2014 survey. 16% of this year’s crop of respondents claimed being a signatory to a union, compared to the 4% who responded so last year.
Even considering it’s generally the older people in contracting businesses with survey-appropriate job titles it’s startling to note the number of respondents this year who reported being between 60- and 69 years old was 41%, compared to 31% a year ago and 22% in 2014. The number of respondents who said they were between 40- and 49 years old at survey time was 16%, compared to the 9% of respondents to last year’s survey who claimed to be in that age group. There were no survey respondents in the 18- to 29-year-old age group for the third year running. This year’s 70-years-old and up crowd was slightly more populous this year (9%) compared to last year’s group (7%).
As part of a long-running trend, the number of respondents this year (57%) who strongly agree that recruiting qualified labor has been difficult for them in the past is up sharply from last year (42%). The reasons? Well, respondents say, there are fewer people going into the trades because they’re not perceived as an exciting field. As one respondent put it, “Young people are not being taught about the advantage of a trade career.”
Residential construction trends
During the past 12 months, the majority of respondents have seen an increase in residential construction, on average by 26%, at par with growth reported in the previous year. Some 66% of this year’s respondents reported “significantly increased” or “increased” residential construction over the past year. This compares to 73% of last year’s respondents who answered this way. Don’t let the drop off for that number paint an unhappy picture for you.
Again this year, a majority of responding contractors reported an increase in residential construction, on average 26%, up just slightly from the previous year’s results and down only two percentage points overall since the 2013 edition of the survey. Only 34 percent say residential construction has either “remained the same” (25%) or “decreased” (9%) during 2016. Only 2% of last year's contractors said there was a decrease during 2015. For the third straight year none of 2016 survey respondents said residential construction “significantly decreased” in their area during the year.
Reasons given for observed increases in residential work during 2016 remain similar to comments received year-over year, including, “Better economy,” “Low interest rates” and “People are feeling secure spending their money.”
Commercial / Industrial / Institutional trends
For the fourth year in a row respondents to the Western Trends Survey reported C/I/I construction activity has also increased during the past 12 months by an average of 27%, similar to the growth trend seen last year, although up slightly from the 24% average increase reported last year.
Exactly half of this year’s respondents say C/I/I construction in their areas either “significantly increased” (9%) or “increased” (41%) during 2016. By extension, the other half of this year’s respondents say C/I/I construction has either “remained the same” (45%) or “decreased” (5%).
As with residential construction, none of this year’s C/I/I respondents say C/I/I construction “significantly decreased” during 2016, the third year in a row.
Respondents’ reasons for the uptick in C/I/I construction were as wide-ranging as those brought up on the residential side, some being almost verbatim comments (“Low interest rates”) while others cited international forces (“Chinese investors”).
Construction, in general, is expected to increase further during 2017. More respondents this year anticipate a 2017 rise in residential construction than in commercial/industrial/institutional construction. Asked to prognosticate the upcoming market conditions for 2017, 45% of this year’s respondents say they expect residential construction to “significantly increase (2%) or “increase” (43%).
On the commercial side, 39% of respondents say they anticipate a “significant increase” (>2%) or an “increase” (36%) in C/I/I work next year.
Compared with last year, construction appears to have shifted away from single-family homes (45% during 2016 vs. 53% in 2015) towards multi-family homes (30% in 2016, 24% in 2015) and industrial buildings/institutions (5% in 2016, 2% in 2015).
2016 Survey details
The target audience for the survey was 2,737 active Reeves Journal subscribers who self-identified as corporate/executive management or general management of a contracting firm. A $5 incentive was given to each qualified participant and one $50 gift card was given to one randomly selected participant. The survey was conducted online from Oct. 24 to Nov. 7, 2016. Of the 2,737 original surveys, 119 were undeliverable or opt-out, leaving a usable base of 2,618 surveys. 44 usable completes were received, providing a response rate of 1.68%.