After several years of growth, the plumbing industry is poised to slow down notably as higher mortgage rates loom, residential construction slows, and labor shortages persist.
Meanwhile, the rise of smart technology and appliances coupled with growing environmental awareness are influencing consumer preferences and the training, knowledge and tools necessary for plumbing professionals to stay ahead of the curve in years to come.
What are the Key Plumbing Trends That Will Impact the Industry in 2023 and Beyond?
As with other building products and home improvement categories, the response to Covid affected the plumbing industry in various ways, some of which are continuing to take a toll. However, the ever-evolving digital world is also a driving factor for movement in the plumbing industry.
Here is a look at some of the main trends impacting trade professionals and consumers in 2022:
1. A Lack of Housing Market Stability in 2022 and 2023
As of the mid-point of 2022, the plumbing industry in the United States was valued about $134 billion, with roughly 130,300 businesses participating in the market, according to IBIS World.
According to the U.S. Bureau of Labor Statistics, there were approximately 469,900 plumbers, pipefitters and steamfitters in 2020. While the industry has experienced steady growth over the past five years, it is projected to see a 0.1 percent decline in revenue in 2022 as the housing market flattens and the average cost of building materials continues to be elevated.
The low mortgage rates we saw in 2020 and 2021—which increased homeowner’s purchasing power due to home equity gains and increased the value of residential construction and compelled more housing starts—are on the rise. All three of these leading indicators point towards a housing market in 2023 where builders are not incentivized to keep building, for a time, softening the need for plumbers in the new construction sector.
There is, however, a strong demand for plumbers in the home repair and remodel sector of the home improvement market, largely because of the age of the existing housing stock in the U.S.
2. Labor and Materials Shortages Persist
A decline in demand for skilled plumbing labor on new construction jobs may not be the worst thing, and there is the possibility it will lead to a healthy re-calibration of the trade professionals services sector.
This possibility could occur because they have, for years, been struggling with a critical labor shortage, retiring of skilled plumbers and little interest by younger demographics to learn the trade. The plumbing industry was hit particularly hard by the labor shortage that spread across industries in 2020 and 2021 and the pain has yet to be alleviated.
According to the NAHB’s Home Builder Institute Spring 2021 Construction Market Report, there was a 55 percent shortage of plumbers who were available for work, making it difficult for contractors to staff projects.
Additionally, raw materials are harder to come by and more expensive in the wake of the pandemic making everything related to the final install of plumbing more expensive.
3. The National Plumbing Fixtures and Fittings Market is Growing
In 2020, the estimated value of the plumbing fittings and fixtures market in North America was $22.40 billion, while the global market was roughly $81.8 billion. The latter is expected to see a CAGR of approximately 4.4 percent, growing to $106.4 billion by 2026 according to a global industry analysis by Report Linker.
The North American market is projected to grow at a higher CAGR of 7.5 percent through 2028, according to analysis by Grandview Research. Our custom market research team at The Farnsworth Group is able to drill deep into the degree to which certain specific plumbing market segments are growing or shrinking, like we did for this finished plumbing manufacturer.
While the offline segment of distribution channels–which includes home improvement centers and other brick-and-mortar retailers–currently accounts for the highest share of revenue, or more than 80 percent, the online segment is experiencing the most rapid CAGR as consumers gravitate toward the convenience of purchasing products through digital distribution channels for DIY and DIFM home improvement projects.
In The Farnsworth Group’s 2021 issue of the Healthy Home Study in partnership with Harvard’s Joint Center for Housing Studies, a whopping 1 in 3 homeowners responded that their home has inadequate or broken plumbing. This indicates a large opportunity for homeowners for plumbing to become a priority for homeowners if the right education and access to affordable materials and installers is resolved.
4. Consumers Seek More Eco-Friendly Options
Environmental concerns continue to be a big part of consumer preferences when it comes to plumbing fixtures and systems—which extends these days to water treatment and conservation systems, landscape sprinkler systems, fire sprinklers, and waste management systems.
Residents are increasingly aware of their water consumption and seeking new ways to lessen their carbon footprint while creating healthier homes.
As a result, we’re witnessing things like an increased demand for tankless water heaters, which are energy efficient, and greywater recycling systems, which are low-cost and easy to install. Additionally, solar water heaters are on the rise, with the U.S. market expected to grow roughly 8.1 percent through 2025 according to analysis by Grandview Research.
In The Farnsworth Group’s 2021 issue of the Healthy Home Study in partnership with Harvard’s Joint Center for Housing Studies, 31.6% of homeowners indicated intent to retrofit their home with tankless water heaters to increase energy efficiency.
5. Smart Products are on the Rise
Homeowners across the U.S. are starting to trend toward smart technology in their residential spaces. In terms of plumbing, this includes everything from smart toilets and motion-sensor faucets to smart leak detectors. These products are intended to make life more convenient for American households while conserving water and energy and preventing things like water damage as well.
For example, the smart toilet market was valued at approximately $6.08 billion in 2018. The sector is projected to experience a notable CAGR of nearly 10 percent, reaching $12.9 billion by 2026.
In The Farnsworth Group’s 2021 issue of the Healthy Home Study in partnership with Harvard’s Joint Center for Housing Studies, 43.1% of homeowners indicated a desire for smart toilets. Even more homeowners, at 48.2% of respondents, indicated they would like to have automatic faucets, but do not currently have them.
6. The Need to Expand Professional Knowledge
In light of the trends toward eco-friendly and smart options, plumbing professionals must be prepared to diversify their knowledge to effectively assist clients in understanding emerging product options and smart home systems integrations.
This could lead to different training and licensing requirements and optional certifications to ensure professional skills stay up to date and relevant in an evolving industry.
Whether or not certifications become essential, trade professionals will have access to more opportunities and sources of revenue by being willing to adapt to shifting consumer priorities and new technology.
7. A Demand for Specialty Plumbing Tools
Innovations are not isolated to plumbing products. Developments of specialty tools and technology are underway. For the most part, smart technology is making it easier and less invasive for plumbing professionals to detect and fix problems.
They can use infrared technology to look for leaks, trenchless pipe equipment to fix sewer lines, or a portable and high-definition camera to inspect drainage systems. Digital tools also make it easier to organize and manage client relationships and offer them preventative maintenance and support. We expect these types of innovations (and adoption by boots on the ground trade professionals) will continue emerging in response to other industry trends.
Efforts in this field need to align with efforts to generate interest in the plumbing profession by eligible participants in the workforce.
Market Research to Succeed in the Plumbing Industry
Having the right data in your arsenal is critical to staying on top of industry trends and planning for the future while developing and pricing your building products strategically. The Farnsworth Group can work with you to conduct targeted market research for the plumbing industry to help you keep up with shifting demands, new technologies and disruptive competitors.