2022 National Charge-out Rates and Business Conditions Survey

2022 NATIONAL CHARGE-OUT RATES AND BUSINESS CONDITIONS SURVEY • Is business better or worse since the pandemic?

• Are you charging more this year?

• What is your biggest business concern right now?

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NATIONAL SURVEY >

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HOW MUCH ARE YOU CHARGING? Results from our 1st national survey on charge-out rates and business conditions. BY LOGAN CASWELL

PHOTO: LIFESTYLEVISUALS/E+/GETTY IMAGES

SUPPLY CHAIN AND STAFFING CONCERNS Welcome, this marks HPAC magazine’s first-ever nation-wide Charge-out Rates Survey, and we were delighted to receive over 150 responses from HVAC and plumbing contractors from coast-to-coast.

As you will see, the participating companies represent a valid reflection of the industry in Canada, with almost 60% of our respondents representing contracting companies with fewer than 10 employees and 97% with under 75 employees.

Our intent with this survey is to capture a snapshot of the industry and share a barometer of how services are being costed across the country and discover how contractors are adjusting to post-pandemic business conditions and current economic realities.

We aimed to make the results of the survey as visually appealing as possible, with some informative commentary thrown in here and there. And among the results you will discover that over three-quarters of our respondents take on apprentices, and that the pandemic hasn’t had too much of an effect on our survey takers ability to keep apprentices under HPACMAG.COM

their wings. Also, more than a quarter of our respondents cited no change to company revenues since the pandemic began, and over 43% report an increase in revenues since March 2020.

We fielded our survey over the month of May, 2022, and if there are a few things this process has taught us, it’s how businesses are seeing a clear shortage in product availability and higher product pricing. Respondents also indicated the challenge in attracting more skilled workers, an ongoing dilemma for the skilled trades.

This first edition of our national survey of the industry has been sponsored by Procore, developers of a construction management platform which allows company owners to take control of personal projects and streamline every process from pre-construction to closeout.

We also wanted to say a very heartfelt thank you to everyone who took the time to complete our 2022 survey, and congratulations to the four winners in our draw for $50 Petro-Canada gift cards.

With that being said, let’s begin.

2022 NATIONAL CHARGE-OUT RATES AND BUSINESS CONDITIONS SURVEY | HPAC

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< NATIONAL SURVEY Industry Snapshot

We wanted to start our survey by “painting the picture” with some demographic details of our respondents. Participants represent every province across the country except PEI (maybe next year), with Ontario leading the way with roughly 55%. Of interest, 24% of the plumbing/ HVAC contracting businesses represented have been around for over 40 years, while 15% of our responses were from companies that have been around for 10 years or less. All of the contracting companies are involved in service/replacement jobs, while 89% also provide work on new construction. And 84% of our respondents represent non-union businesses.

Type of work you do?

Plumbing

52%

Hydronics

53%

HVAC

75%

Refrigeration

38%

Residential

65%

Light Commercial

69%

Large Commercial/ Industrial

36%

Is your business union or non-union?

Union

1-9 employees

57%

10-24 employees

31%

50-74 employees

1%

75+ employees

3%

>1%

Manitoba

6%

British Columbia

13%

What is the approximate annual revenue for your business?

Quebec

3%

Ontario

56% Saskatchewan

3%

Atlantic Canada

37%

6%

3%

5-10 yrs

12%

11-15 yrs

7%

16-20 yrs

10%

21-25 yrs

9%

26-30 yrs

10%

31-35 yrs

15%

36-40 yrs

10%

40+ yrs

24%

4

$10 million+

$2.5 – $4.9 million

<$1 million 30%

17%

8% 8% $5 – $9.9 million

$1 – $2.49 million

How many years have you been operating?

0-4 yrs

8%

25-49 employees

Territories

12%

84%

How many workers does your company employ?

Where do you work?

Alberta

Non-union

16%

Thinking back to March 2020, how has your business’s revenue been affected since the pandemic began?

26%

27%

19% 11% 6%

6%

5%

No  down  down  down >50% >25% <25% change

HPAC | 2022 NATIONAL CHARGE-OUT RATES AND BUSINESS CONDITIONS SURVEY

 up <25%

 up >25%

 up >50%

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How many apprentices does your business employ, on average?

24% 0 apprentices

What is your charge out rate for Industrial work (per hour)?

Service

New Construction

Emergency $174

2% 21+ apprentices 1% 16 to 20 apprentices

$165

64%

$162

1 to 5 apprentices

$111 $110

9% 6 to 10 apprentices

$106

$102

How has the pandemic impacted your ability or desire to take on apprentices?

Fewer apprentices

22%

No change

69%

More apprentices

9%

What is your charge-out rate for Residential work (per hour)?

New Construction

Service

Emergency $172

Union

Non-union

National Avg

How much have you increased your rates since last year?  4-6%

No change 14%

26%

 11%+

22%

24%

 1-3%

14%

 7-10 %

Do you include your truck in your standard rate?

$164 $163 $113 $113 $113

Yes

No

54%

$101

46%

$100 $96 Non-union

Union

National Avg

What is your charge-out rate for Commercial work (per hour)?

New Construction

Service

Emergency $176 $171 $170

Do you account for mileage in your standard rate?

Yes

No

39%

61%

Do you have a minimum service charge?

No

15%

$113 $112 $100

RRC

$100 1996

$99 Non-union HPACMAG.COM

Union

Yes

85%

National Avg 2022 NATIONAL CHARGE-OUT RATES AND BUSINESS CONDITIONS SURVEY | HPAC

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Do you have a minimum emergency service charge?

No

24%

Does your business use one specialized service business software solution combining estimating, quoting, scheduling and invoicing?

Investigating options

13%

Yes

RRC

76% 1996

Yes

Do you have a different charge-out rate with apprentices on site?

34% No

54% Yes

50%

No

50%

How have safety protocols (e.g. sanitizer, wipes, no shared tools, etc.) added to your direct costs?

What is your Primary business concern right now? (pick one) 32%

10% Not applicable

32%

21%

1% Over 20% increase 1% Increased by 16% to 20%

10%

58% Up to 5% increase

9% Increased by 11% to 15%

2% Supply Chain Inflation (product availability)

Staffing

Training

Attracting new business

21% Increased by 6% to 10% Other responses we received included: “Tightening service area and reducing travel time”; “Supply chain and staffing are of equal concern”; and “Lack of qualified trades people.”

Thank you

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We do hope the results of this survey will provide some guidance and perhaps generate some feedback from our readers who would like to express how they would have responded to our line of questioning.

Our hope is to make this survey a recurring item, so if you have suggestions for how we can provide even greater insight into how the HVAC and plumbing industry is doing in Canada, please feel free to reach out to dpicklyk@hpacmag.com. We would appreciate your input.

Of course we would like to thank the sponsor of this year’s survey, Procore, for helping us bring you these results. We all rely on our industry partners to help us bring you news and information.

And of course, thank you again to the over 150 people from across the country who took 5 minutes out of their days to reply to our completely anonymous survey. We wish everyone the best for the year ahead, and we look forward to more insights next year.

HPAC | 2022 NATIONAL CHARGE-OUT RATES AND BUSINESS CONDITIONS SURVEY

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