The Financial Foreman Insights – Plumbing Part 2
The plumbing industry is changing, a change in the types of dwellings we are constructing. This has a flow-on effect to the number of plumbing amenities per dwelling unit and exposed roof areas. So as we look to the future, what is the industry moving towards?
Switching household demand
Some plumbers have adapted to a changing household demand and found a successful niche by offering specialist installation service to facility households switching from traditional gas or electric hot water systems to more environmentally friendly solar hot water systems. A demand that is expected to grow in the near future.
New residential building and renovation work
The recent increasing demand for plumbing work for the installation of fixtures and fitting in new buildings and renovation work on the existing buildings is expected to continue. The rise in household discretionary income will support this demand.
Plumbing emergency and maintenance work
The demand for plumbing emergency repair and maintenance work in the housing market will remain solid, supported by trends in household discretionary income and consumer spending. Smaller plumbing contractors will continue to derive the bulk of their revenue from this work, however, an increasing share of this market will be met by contractors operating through franchise arrangements or innovative schemes, such as Emergency Home Assist (EHA) and programs offering by insurance organisations.
“The growth in Emergency Home Assist (EHA) and programs offering by insurance organisations shouldn’t be ignored”
Non-residential building construction (commercial) work
Strong demand is forecast for plumbing installation work on new office, retail and warehouse construction projects. Demand is expected to strengthen for work in the institutional building market (educational facilities and hospitals).
Moderate improvement in demand for infrastructure markets over the next few years. Reflecting the recovery of investment in water supply, sewerage and pipeline developments to cope with the expanding population base and improve water security.
What to do next
One eye should be kept in the future growth of the plumbing industry and expected revenue streams. The strategic decisions on the future direction of your business should be based on this data and give you an advantage over your competition.
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Disclaimer: This article should not be intended as your primary source of Tax, Accounting or Financial Advice. Always contact your Accountant for help.
An accountant with nearly a decade of industry experience, Joshua has worked extremely close with his clients, educating and guiding them with through building, growing and preparing their businesses for the future.