Industry Spotlight: Heating & Air-Conditioning Contractors in the US
- Joe Gitto
- Jul 5
- 2 min read
The heating and air-conditioning contracting industry is essential to the comfort, safety, and operational efficiency of homes, businesses, and industrial facilities across the United States. Contractors in this field install, maintain, and repair heating, ventilation, air-conditioning (HVAC), and refrigeration systems. Their work spans new installations, alterations, routine maintenance, and emergency repairs in a wide variety of structures, including residential properties, office buildings, manufacturing plants, and educational institutions.
In recent years, the impacts of climate change have become a major driver of HVAC demand. Hotter summers and changing weather patterns have increased the need for cooling systems, while extreme weather events highlight the importance of reliable heating. However, high interest rates have posed challenges for the industry, slowing construction activity and dampening demand for new installations, particularly in the housing market. The slowdown in residential construction has meant fewer opportunities for new HVAC system sales, although retrofits and replacements remain a steady source of revenue.
Federal incentives, particularly those provided under the Inflation Reduction Act, have helped offset some of these headwinds by offering tax credits and grants for installing energy-efficient HVAC systems. This has created opportunities for contractors to tap into the growing market for eco-friendly, high-performance systems. While nonresidential construction has seen mixed results—struggling in the office sector due to inflation and remote work trends—demand in healthcare, manufacturing, and other essential industries remains strong.
Financially, the HVAC industry is robust. In 2025, annual revenue is projected to reach $156.2 billion, with growth continuing through 2026 at a rate of about 2.6%. The sector employs more than 604,000 workers, with job growth expected to match revenue growth over the next five years. With around 117,000 businesses operating nationwide, the average revenue per company is supported by stable profit margins of 5.4%, equating to approximately $63,245 in profit per business. Total industry profit between 2019 and 2024 reached $7.2 billion, demonstrating consistent performance even through the COVID-19 pandemic.
Key drivers of industry performance include climate trends, government incentives, construction activity, and technological advancements in HVAC systems. Contractors who can integrate energy-efficient solutions, offer competitive financing, and adapt to changing regulatory and market demands will be best positioned for success.
Looking ahead, the industry’s future lies in balancing short-term operational needs with long-term strategic investments in sustainable technology. Companies that diversify their service offerings, maintain strong technical expertise, and align with evolving environmental standards will be well-placed to capture market share. Advisory support from firms like Blue Sky Exit Planning can help HVAC businesses benchmark their operations and position themselves for growth in an increasingly competitive marketplace.
For a deeper dive into the key takeaways and to see how your business compares to industry benchmarks, contact Joe at Joe@blueskyexitplanning.com.
Citation:Pigott, M. (2025). 23822A Heating Air-Conditioning Contractors in the U.S. Industry Report. IBISWorld Industry Reports. https://www.ibisworld.com/
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