Many of us get caught multitasking throughout our workday and have no time to step back and look at the big picture.
Where is the HVAC market heading? What new technologies are best? Which road will lead my company to success?
Every four years or so, the Sheet Metal and Air-Conditioning Contractors’ National Association’s New Horizon Foundation conducts a study of contractors, architects and specifiers of HVAC systems. The “futures study” results provide a glimpse of what may lie ahead. The sheet metal works industry data we collect give us an idea of what trends we should take seriously.
One thing I found interesting in this year’s report is that it says the industry has changed more in the last five years than in the previous 30 years, and that this pace of change will continue — something I can attest to. Here’s some more of what we learned.
The rapidly increasing pace of marketplace change will require owners to adapt to an unknown future. Owners reported an overriding need for increased organizational agility, meaning that their building spaces must be multifunctional. For example: today a warehouse, tomorrow a call center. Agility may be even more important for the contractors and engineering firms that serve these owners and their changing needs. In the future, owners will want HVAC construction contractors to provide asset flexibility, new approaches to manage regulatory unpredictability, and a capability to meet their tight schedules and budget needs.
Significant new national or statewide regulations mandating equipment changeouts are unlikely in the next five years. This, in combination with relatively low energy prices, means that replacement of functioning, but inefficient equipment will remain a limited driver of HVAC spending moving forward.
There are exceptions to this in government and institutional markets, where mandates to increase efficiency play a role. There are also specific owners who have internal green and/or efficiency goals, which lead to accelerated replacement of older, less efficient equipment. But this is the exception, not the norm.
It takes more than BIM
Building information modeling is no longer a significant differentiator for HVAC contractors, but the internet of things — aka IoT — has the potential to make a huge impact on the industry. The ability to work in BIM and develop, edit and operate BIM models is now viewed as a core capability for most significant nonresidential projects and owners in the U.S. However, BIM will expand into facilities management in the next decade. Larger owners are already requiring that their BIM models act as their facilities management operating systems.
As the wireless connected device movement emerges, it will profoundly affect building systems and components. The potential to replace current cabled connectivity with any number of wireless protocols is too significant to ignore. Components as specific as variable-air-volume boxes, fans and other building system elements will likely be connected to the internet and monitored remotely. The IoT may offer more potential for increased metering and verification, but the dynamics of how this will affect HVAC contractors’ service business is complex and unclear. Energy service companies, particularly those already providing demand management and demand response services, could potentially enter the market and expand into the monitoring, operations and maintenance market, resulting in some contractor market loss.
The lack of a trained and flexible workforce is viewed as a threat by many contractors. However, those who have well-trained employees view it as a primary source of competitive advantage. Interesting, though, was the comment that there is a need to develop skilled craftsmen who are experts at sheet metal/HVAC and a range of other skills needed in today’s HVAC market. As owners demand highly varied and flexible solutions to their HVAC needs, HVAC and sheet metal forming contractors need to provide a workforce that can meet these needs.
Next-gen workers needed
Contractors who can rapidly develop younger employees will have an advantage in the market in coming years. Generational transition continues to be a challenge. Many companies are ahead of where they were four years ago in planning for the retirement of the baby boomer generation, but there is still a long way to go. The increasing rate of baby boomer retirement means that companies will need to reach into the younger Generation Y (ages 21-37) to fill supervisory and management positions.
A focused company is more meaningful to its customers, employees and management staff. It energizes your employees to excel at their jobs, and it makes your customers glad they’re doing business with you.
Joseph Lansdell is president of Poynter Sheet Metal in Greenwood, Indiana, and 2016-17 SMACNA president.