Industry Insight Report: HVAC and Plumbing Contractors Q2-2026

The HVAC and plumbing industry continues to demonstrate resilience as we move through the second quarter of 2026. While equipment shipments remain mixed across product categories, long-term demand for installation, maintenance, and replacement services continues to support healthy buyer interest. At Lion Business Advisors, we’ve continued to see strong acquisition activity for established HVAC and plumbing companies throughout Texas, particularly those with recurring service revenue, experienced management teams, and a diversified customer base.

Equipment Demand Reflects Shifting Consumer Preferences

Recent shipment data from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) illustrates an evolving equipment market. Shipments of air-source heat pumps increased 9.8% year over year in March, while central air conditioner shipments remained essentially flat with a modest 0.1% increase. Water heater shipments were mixed, with residential gas and electric storage models declining while commercial electric water heater shipments increased 12.3%.

These trends reflect ongoing investments in energy-efficient technologies and commercial infrastructure while residential replacement cycles normalize. For business owners, companies that offer expertise across multiple equipment types, including heat pumps, commercial systems, and high-efficiency upgrades, may be better positioned to capture future growth and attract sophisticated buyers.

Labor Market Remains a Competitive Advantage

The industry’s labor market continues to outperform the broader economy despite slowing employment growth. According to Vertical IQ, employment among plumbing, heating, and air-conditioning contractors increased 0.8% compared to one year ago. More notably, industry employment has expanded 31.5% over the past decade, significantly exceeding the 11.3% growth experienced across all private employment.

Wage growth also remains healthy. Average hourly wages reached $41.07 in April, representing a 5.3% year-over-year increase and a remarkable 56.7% increase over the past ten years. Businesses that successfully recruit, retain, and develop skilled technicians continue to command stronger buyer interest because workforce stability reduces operational risk after acquisition.

Texas Market Perspective

Texas remains one of the country’s strongest markets for HVAC and plumbing contractors. Continued population growth, commercial development, and year-round service demand create favorable conditions for well-managed contractors. We are also monitoring increased investment in skilled trades education following Google and Meta’s $165 million commitment to workforce training programs supporting infrastructure and data center expansion. While the long-term impact is still developing, additional investment in the skilled trades could help strengthen the future labor pipeline for contractors across Texas.

Industry Outlook

Vertical IQ forecasts 4.7% compound annual sales growth from 2026 through 2030, exceeding expected growth for the overall economy. From an M&A perspective, buyer demand remains healthy, although acquirers are placing greater emphasis on operational quality than revenue alone. Companies with recurring maintenance agreements, clean financial reporting, diversified customer relationships, and scalable operating systems continue to receive the strongest attention from strategic buyers, private equity groups, and qualified individual acquirers.

If you’re considering selling your HVAC or plumbing business within the next several years, today’s market still offers attractive opportunities for prepared owners. Understanding your company’s value and addressing key value drivers before going to market can significantly improve both buyer interest and transaction outcomes.

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• 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).