Slowing Construction in Glens Falls, Queensbury Not Good For HVAC Business

Not surprisingly the local construction numbers in Glens Falls and Queensbury were down in 2011. The Post Star reported today that construction in both areas declined by roughly half the level of 2010.

From The Post Star:

The city issued building permits for $13.81 million of construction in 2011, compared with $25.26 million in 2010, according city Code Enforcement Office annual reports.

Queensbury experienced a similar decline in construction activity, dropping to $28.6 million in 2011 from $41.2 million in 2010, according to the town Community Development Office annual report.

Read more: Construction Activity Slows in 2011 for Glens Falls, Queensbury

We are seeing the same thing in our business with the majority of our work coming from people remodeling a room or basement, not building new homes. There is much less demand for full duct systems and more for furnace replacements or repairs. There has been minor demand for some movement of duct work for better air flow, upstairs heat or new additions. However, this has not been something to be counted on like it may have been in the past. The jobs are scare and competitive.

Because we focus on sheet metal fabrication along with heating and cooling installation, we have a good idea of what's going on locally. Granted, we are very small in comparison to other companies. However, we have been in the area for over 20 years and know many companies that have been seeing the same things. Much of the trickle down fabrication for these companies comes our way and last year was much slower.

If the 2011 trends continue through 2012, business in the local residential HVAC market will continue to feel the pain of the last few years. I don't see many of our customers on as regular a basis like before the financial crisis. Many have found jobs in other fields or signed on with larger companies in the area. This can hurt us a bit because a lot of our business comes from the micro business service and installation professionals.

We can only hope for a warm summer and good air conditioning sales because the mild winter has not helped the beginning of this year. A summer with last years cool temperatures and we could see some lower revenues through the middle of the year as well. Last year we noticed a lot of customers asking about widow units rather than a new central air system.

If that trend continues, it would not be good for business throughout 2012.

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Posted on February 19, 2012 and filed under HVAC, News, Uncategorized.