Any rating exceeding 50 indicates a higher share of PHCC contractors reporting industry conditions are better than they were in the previous quarter, while any rating under 50 indicates a higher share of respondents reporting conditions are worse than they were in the previous quarter.

Plumbing contractors reported a lower future confidence index of 42.2% versus 48.9% in the fourth quarter of 2022, indicating contractors who own plumbing businesses believe industry conditions were worse than the previous six months. HVAC contractors reported a higher future confidence index of 56% versus 60.6% in the fourth quarter, suggesting industry conditions still feel better than the previous six months, though sentiment is trending lower.

The top contractor challenges reported were:

1. operating short-staffed;
2. customers holding off on projects;
3. low call volumes;
4. too much work; and
5. new construction slowdown.

While roughly 70% of PHCC contractor respondents anticipated normal to better sales in the future, 30% of respondents are not operating with a full staff, employees, and technicians. Double the number of respondents reported that customers are holding off on projects and replacements due to economic concerns — a significant increase when compared to fourth quarter results. 72% cited rising costs, and half of the respondents noted delays in shipping materials. The results were flat at 25% for those who indicated concerns about lower construction starts when compared to the last quarter.

Looking ahead, 73% of PHCC respondents are anticipating increased cost of doing business (parts, materials, labor), and most of those respondents are worried about an impeding recession, as well as continued challenges finding qualified employees and technicians.

The top three concerns for contractors over the next six months include the cost of health insurance, fear of recession, and increased (additional) insurance costs. Additional concerns were increased regulations, decreased construction starts, and cash flow.

“We are very pleased to unveil this first quarter 2023 Contractor Confidence Index that will help us determine the current sentiment of PHCC members,” said Dave Frame, president, PHCC—National Association. “With access to this valuable information, our members will be able to track challenges and trends that affect their business, as well as maximize any business opportunities that are identified. And from an organization perspective, PHCC will be well-positioned to identify and develop programs and services that will meet our members’ needs.”

The PHCC Business Intelligence Department works to favorably position PHCC members and affiliates to achieve the highest level of market awareness, professionalism, leadership, and business profitability in the emerging and ever-changing built environment.

The PHCC Contractor Confidence Index (CCI) is based on a quarterly survey of PHCC members designed to take the pulse of the plumbing heating and cooling market. The survey asks respondents to rate market conditions for the present time and for the next six months. Survey results and the PHCC CCI were developed as a general sense of contractor sentiment and should not be used as a guaranteed indication of future performance of economic and industry performance. Many PHCC contractors provide both plumbing and HVAC installation and service. For more information, visit www.phccweb.org/business-intelligence.