Plumbing: Industry overview and trends to watch
Substantial growth is expected for the plumbing industry in the near future — take steps now to prepare
The plumbing industry encompasses a wide range of professionals and generally includes anyone who installs or repairs pipes that carry liquids or gases. Plumbers work in various settings and are often on call at all hours for situations such as leaks or pipe bursts that require immediate attention to prevent serious, long-term damage.
Typical tasks for plumbers can include fixing leaking pipes, installing household fixtures (e.g., sinks, showers and toilets), repairing or replacing water heaters and water conditioning equipment, and conducting lawn sprinkler system maintenance.
In most instances, plumbers will complete an apprenticeship or a technical school program to gain experience. The majority of states and cities require plumbers to be licensed.1
As for industry classification, plumbers fall under a larger group of artisan or specialty contractors:
- NAICS 238220 Plumbing, Heating and Air-Conditioning Contractors
- SIC 1711 Plumbing, Heating and Air-Conditioning
Industry outlook and trends
Overall, the plumbing industry is growing and doesn’t show signs of slowing down. While the COVID-19 pandemic initially led to economic fallout and increased unemployment rates across industry lines, the plumbing sector has mostly recovered. In fact, demand for the plumbing industry’s services is expected to accelerate over the next 5 years. The sector’s services were even deemed “essential” amid the pandemic. Such industry growth is evident when you consider the 127,343 plumbing businesses and 565,537 industry jobs as of 2021, with revenue of about $124 billion.2
However, it should be noted that plumbers are a part of the larger construction sector. This means that any economic downturns affecting the construction industry would also have a significant impact on plumbers. For example, various material shortages have affected the construction industry throughout the past year, thus driving up the cost of building materials and discouraging homeowners from starting new household projects. In turn, the plumbing sector has also encountered material shortages and subsequent cost surges, making some customers less willing to seek out plumbing services. 3
Furthermore, nonweather water damage has become a rising concern in the construction industry, contributing to more than one-third of sector-specific losses and costing the insurance sector over $16 billion every year.4 This form of damage is especially concerning among plumbers, as these professionals work directly with pipes and fixtures that carry water. What’s worse, repairing and rebuilding property that has been damaged by water could be increasingly difficult amid continued material shortages. Therefore, plumbers must make a conscious effort to prevent nonweather water damage with proper mitigation strategies. Nationwide® has a customizable Construction Water Mitigation Program that plumbers can utilize.
Here are some other notable industry considerations.
According to the most recent data from the U.S. Bureau of Labor Statistics (BLS), the plumber job outlook is estimated to increase by 5% over the next 10 years. And with industry-specific growth outpacing employment averages, finding qualified workers is likely to be a major concern for plumbers. This issue is particularly concerning as a growing proportion of the workforce reaches retirement age; the share of employees over age 55 is expected to rise to nearly 25% by 2024.5
Additionally, due to the sector’s extensive training and apprenticeship programs, it can take years for someone to become a licensed professional, making it critical for plumbers to prioritize employee retention. In order to do so, plumbers may increase their employees’ salaries. As it stands, the average annual salary for a plumber is $56,330 ($27.08 per hour), compared with $41,950 across all other occupations the BLS tracks.6
Environmental concerns continue to be a major trend in the trades, and plumbing is no exception. Reducing water usage is a national focus, particularly in areas prone to droughts. In response, many plumbers are leveraging technology to reduce energy usage and improve the efficiency of their operations. Trending technology7 in plumbing includes:
- Tankless water heaters — Traditional tank water heaters are inefficient. They’re designed to heat large quantities of water regardless of how much is actually needed — yet tank water heaters still may not be able to keep up with the demand of large households. Tankless water heaters heat only what is actually needed. As a result, the Department of Energy estimates up to 25% in energy savings for those who utilize tankless systems.8
- Greywater recycling systems — Greywater refers to wastewater from sinks, washing machines, showers, baths and kitchen appliances. Greywater is relatively clean, thus contrasting heavily with blackwater, which can contain human waste. Greywater systems are designed to capture water for reuse, thus reducing overall water demand. While it can’t be used for human consumption, greywater can still be utilized for tasks such as watering the grass or the garden.
- Smart pipe systems — These systems use sensors to determine whether there’s a leak within pipes. Being able to identify a leak quickly can help prevent serious pipe damage.
- Infrared technology — While infrared cameras are often used to detect electrical issues, they can also help detect leaks and excess moisture within plumbing systems as well as determine the source of such problems.
- Telematics — GPS and other telematics systems for tracking vehicle data are being more widely implemented by plumbing companies and other contractors with light- and medium-duty vehicles. In addition to helping track risky driver behaviors such as speeding and hard braking, they can also assist with vehicle dispatching and operational efficiency.
Apart from utilizing technology to minimize energy usage and boost efficiency, plumbers have also begun implementing various digital elements to enhance their services and provide a more seamless customer experience. Such elements include introducing online tools (e.g., websites and mobile applications) for scheduling appointments, sending personalized emails and offering various ways to pay invoices (e.g., cashless payment options). As more customers leverage the internet to select services, it has become increasingly important for plumbers to establish an online presence. In particular, plumbers must work to ensure they receive positive online reviews and promote brand awareness. After all, even one bad review can lead to lost business.
Apart from utilizing technology to minimize energy usage and boost efficiency, plumbers have also begun implementing various digital elements to enhance their services and provide a more seamless customer experience. Such elements include introducing online tools (e.g., websites and mobile applications) for scheduling appointments, sending personalized emails and offering various ways to pay invoices (e.g., cashless payment options). As more customers leverage the internet to select services, it has become increasingly important for plumbers to establish an online presence. In particular, plumbers must work to ensure they receive positive online reviews and promote brand awareness. After all, even one bad review can lead to lost business. 9
Insights on major lines of coverage
Here’s an outline of common exposures, precautions and lines of coverage that may apply in the plumbing sector.
Specific property exposures will depend on the type of work the plumber performs. Some operations may involve only contractor storage and an office space. Other operations (e.g., cutting and welding) may involve specialized equipment and materials that could create potential fire hazards and additional property exposures. As such, a hot work program should be in place for any welding or cutting operations. In addition, an effective housekeeping regimen should be implemented to prevent clutter or waste buildup on-site and subsequent fire risks.
Property theft is also a significant concern for plumbers. This is because many common plumbing materials are considered primary targets for thieves.10 Additionally, the cost of copper pipe has steadily increased in recent years, attracting potential thieves. Plumbers may also use or store expensive tools at their places of business, within customers’ homes and in vehicles, making these items more vulnerable to theft. To prevent property thefts, plumbers should leverage security measures such as utilizing alarm systems, installing security cameras on-site, keeping buildings and vehicles locked when not in use, and ensuring that expensive tools are appropriately labeled and stored.
Cuts and lacerations caused by piping or working in tight places are common injuries in the plumbing sector. Also, exposure to contaminants, fumes, mold from water-damaged materials, asbestos and lead are hazardous-substance concerns. Employees should be supplied with adequate personal protective equipment (PPE) to minimize these injuries and exposures. Workers also should be properly trained in hazard communication, chemical safety and PPE use.
Electrocution risks are significant for plumbers, as they frequently work in and near water. Specifically, exposed and live electrical components can create potential shock risks. To reduce electrocution hazards, plumbers must educate their employees on electrical safety procedures. In addition, plumbers need to fully understand how to inspect electrical equipment and related components before working with or near them. Employees should be instructed to never work with faulty equipment.
Although plumbers strive to provide high-quality services to their customers, the risks of faulty work and potential project mishaps remain. If customers experience harm or further damages due to the services they received (or didn’t receive), plumbers could be held liable for the resulting losses. As precautions, plumbers should have a variety of programs (e.g., water mitigation, hot work, employee training and project recordkeeping) in place to minimize their losses and ensure adequate services for their customers.
Considering these exposures, recommended lines of coverage for plumbers include general liability, inland marine, commercial property, workers’ compensation, commercial auto and umbrella insurance. Keep in mind that Nationwide also has specialized forms and coverage options for contractors — including plumbers.