Industry Insight Report: HVAC & Plumbing Contractors Q2-2025
Industry Insight Report: HVAC & Plumbing Contractors Q2-2025
The HVAC and plumbing industry continues to experience robust growth in Q2 2025, buoyed by strong employment gains, rising wages, and increased interest from private equity. At Lion Business Advisors, we’ve seen continued buyer demand for well-run contractor businesses, particularly those with recurring service agreements, diverse customer bases, and systems that support owner absenteeism or transition.
AI Adoption Gains Momentum in Home Services
Artificial intelligence is rapidly transforming the HVAC and plumbing space. New platforms like Netic are streamlining operations by automating customer communication, predicting maintenance needs, and optimizing dispatch schedules. Much of this innovation is being driven by private equity firms, which are actively consolidating fragmented home-service businesses to achieve scale. For owners considering a sale, investing in modern software and CRM-integrated tools can significantly boost valuation and buyer interest.
Employment and Wage Trends Reflect Strong Industry Health
According to the Bureau of Labor Statistics, employment in the HVAC and plumbing sector rose 2.8% year-over-year in April and has grown a staggering 38.7% over the past decade, far outpacing private sector averages. Wages also continue to climb, with average hourly earnings reaching $38.97 in April, a 4.2% increase from last year. These labor trends point to a healthy pipeline of skilled workers and reflect the growing demand for HVAC and plumbing services across both residential and commercial markets.
Industry Forecast: Outpacing the Broader Economy
The HVAC and plumbing contractors market is forecast to grow at a compounded annual rate of 5.07% from 2025 to 2029, well above expected GDP growth. In Texas specifically, we continue to see strong demand for HVAC businesses tied to new residential construction, energy efficiency retrofits, and ongoing maintenance needs driven by the region’s hot climate.
Outlook: A Strong Seller’s Market Continues
As we move into the second half of 2025, deal activity remains strong. Buyers—particularly those backed by PE firms or SBA lenders—are aggressively pursuing acquisition opportunities. Businesses with clean books, steady cash flow, and minimal owner dependency are commanding premium multiples.
If you’re considering selling your HVAC or plumbing business in the next 1–3 years, now is a great time to get a valuation and begin preparing. The market continues to reward owners who plan ahead.
Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).
Industry Insight Report: HVAC & Plumbing Contractors Q2-2025
The HVAC and plumbing industry continues to experience robust growth in Q2 2025, buoyed by strong employment gains, rising wages, and increased interest from private equity. At Lion Business Advisors, we’ve seen continued buyer demand for well-run contractor businesses, particularly those with recurring service agreements, diverse customer bases, and systems that support owner absenteeism or transition.
AI Adoption Gains Momentum in Home Services
Artificial intelligence is rapidly transforming the HVAC and plumbing space. New platforms like Netic are streamlining operations by automating customer communication, predicting maintenance needs, and optimizing dispatch schedules. Much of this innovation is being driven by private equity firms, which are actively consolidating fragmented home-service businesses to achieve scale. For owners considering a sale, investing in modern software and CRM-integrated tools can significantly boost valuation and buyer interest.
Employment and Wage Trends Reflect Strong Industry Health
According to the Bureau of Labor Statistics, employment in the HVAC and plumbing sector rose 2.8% year-over-year in April and has grown a staggering 38.7% over the past decade, far outpacing private sector averages. Wages also continue to climb, with average hourly earnings reaching $38.97 in April, a 4.2% increase from last year. These labor trends point to a healthy pipeline of skilled workers and reflect the growing demand for HVAC and plumbing services across both residential and commercial markets.
Industry Forecast: Outpacing the Broader Economy
The HVAC and plumbing contractors market is forecast to grow at a compounded annual rate of 5.07% from 2025 to 2029, well above expected GDP growth. In Texas specifically, we continue to see strong demand for HVAC businesses tied to new residential construction, energy efficiency retrofits, and ongoing maintenance needs driven by the region’s hot climate.
Outlook: A Strong Seller’s Market Continues
As we move into the second half of 2025, deal activity remains strong. Buyers—particularly those backed by PE firms or SBA lenders—are aggressively pursuing acquisition opportunities. Businesses with clean books, steady cash flow, and minimal owner dependency are commanding premium multiples.
If you’re considering selling your HVAC or plumbing business in the next 1–3 years, now is a great time to get a valuation and begin preparing. The market continues to reward owners who plan ahead.
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