Contractors Expect Growth in 2010

The Service Roundtable Contractor Expectation Index is 79 for 2010, indicating a broad expectation of business expansion (an index above 50 reflects positive expectations). The index includes the outlook of air conditioning, electrical, and plumbing contractors in the residential service market.

Expectations are strongest among plumbing contractors at 84. Electrical contractors follow closely at 83. Air conditioning contractor expectations are 78. When contractors who were expecting a better year in 2010 were asked why they see improvement, the most common answer was an increase in marketing on the part of the contractor, particularly to existing customers.

“We have increased our marketing dollars by 75%,” commented one contractor.

“We are concentrating more on marketing to our existing customer base and some social networking and website,” added another.

Contractors also cited an improving economy, pent up demand from homeowners delaying major expenses, the last year of the tax credits, better training, and pure hustle.

“I think the consumer will be slowly starting to spend money they have been holding onto in the past 18+ months,” noted one contractor.

“I am investing $100,000 in sales training to ensure that we will be ahead this year,” commented one contractor.

“We are learning new ways to sell smarter,” summed up another, “and have been actively working on bringing in new customers and retaining our existing customers.”

Not all contractors are optimistic. Those believing 2010 will be flat or in decline cite the economy, a lack of credit, consumers deferring major expenses, and Washington policy.

According to one contractor the economy will be down due to the “lack of consumer ability to get financed on simple consumer loans. Customers are fixing up rather than replacing.”

“Our customers either don't have a job and money to spend,” noted one contractor, “or even if they do have a job, they are still not spending their money.”

Contractors are less optimistic about the next month. Nevertheless, most expect month-to-month improvement in February and better February performance compared to a year ago. While contractors in the plumbing, electric, and HVAC trades appear to believe that more momentum will be generated as the year progresses, HVAC contractors are generally more pessimistic about February due to industry seasonality.

“February is always slower than January (less demand calls, fewer leads, etc.),” commented one contractor.


Service Roundtable Contractor Expectation Index

	Total	HVAC	Plumbing	Electrical
2010 vs 2009	79	78	84	83
Feb ’10 vs Jan ‘10	60	59	62	67
Feb ’10 vs Feb ‘09	72	70	79	71

The index is based on survey responses of 191 Service Roundtable members during the last week of January 2010. The survey is calculated by taking the percentage of contractors expecting growth and adding half the percentage expecting no change. An index of 50 reflects expectations for flat growth, over 50 reflects expectations of expansion, and less than 50 reflects expectations of contraction.

The Service Roundtable is the world’s largest private contractor business alliance with members in the electrical, plumbing, and heating and air conditioning trades. Members come from all 50 states, Canada, Australia, Europe, the Caribbean, and South Seas Islands. For more information visit www.ServiceRoundtable.com or call 877.262.3341.