Top 4 Trades and HVAC Trends for 2025

As 2024 draws to a close, we’re stepping into 2025 with fresh anticipation for what’s ahead. One sign that gives us optimism? Mortgage rates have shown a promising decline—from 7.79% in October 2023 to 6.12% a year later—sparking hope for many aspiring homeowners.

With this shift, tradespeople and HVAC professionals will play a pivotal role in transforming these houses into comfortable, efficient dream homes. So, what key trends should the industry prepare for in 2025? Let’s have a look.

TREND 1 – Navigating Ongoing Supply Chain Challenges

While global supply chain disruptions have eased since their peak in 2020, their lingering effects continue to impact the trades and HVAC industries. Materials such as compressors, semiconductors, and plywood remain difficult to source, with fluctuating prices adding further uncertainty.

These constraints put significant pressure on businesses, with rising wages further contributing to increased costs. This has affected project budgets for both contractors and consumers, a challenge likely to persist into the coming year.

However, it’s not all doom and gloom. This coming year, businesses that implement innovative strategies to manage costs and streamline delivery can stand out in the market. By diversifying suppliers, investing in inventory management systems, or adopting prefabricated solutions, trades and HVAC contractors can better navigate supply chain risks. Those who adapt effectively will be well-positioned to attract and retain customers amid ongoing challenges.

TREND 2 – Increasing Demand for Trades and HVAC Services

Despite some economic uncertainty, demand for home services remains robust. The residential HVAC market shows no signs of slowing down. In fact, it’s expected to grow from $14.2 billion in 2023 to$27.1 billion in 2032.

As remote work persists, ADUs have gained popularity as home offices or rental properties. The ADU market alone is projected to grow from $3.3 billion in 2023 to $10.6 billion by 2030, with a CAGR of 18.6%. All of this to say, trades and HVAC contractors will definitely have their hands full in 2025.

In order to both keep up with demand and capitalize on it, professionals should consider creating tailored packages for energy-efficient solutions and home improvements. They could also look to our next trend for a helping hand.

TREND 3 – Investing In Trades and HVAC Technology

Speaking of keeping up with the increasing demand, technology continues to be a game-changer for the trades industry, offering tools that streamline operations, enhance customer experiences, and improve safety.

One case that drives this point home comes from one of our very own customers. Four Quarters Mechanical was facing a big challenge in the form of an unorganized warehouse were their team had no visibility at all- a problem not at all uncommon in warehouses around the country.

With the help of technology, they were able to stay on top of their inventory, leading to smarter purchasing and a positive impavt in their bottom line. They’re also able to complete their jobs without any issues since they now have everything they need thanks to the different tracking features they use.

Trades and HVAC businesses looking to keep up with demand, improve their efficiency, and maybe even attract tech-savvy workers should definitely enter 2025 ready to evaluate the right technology vendor that fits their needs.

TREND 4 – Growing Interest from Private Equity Firms

With the ongoing demand and growth potential we’ve seen in the space the past few years, it’s no wonder these private equity (PE) firms will continue to eye the HVAC sector with interest in 2025.

According to research conducted by Raw Selection, there are currently 209 HVAC portfolio companies and 94 PE firms investing in the sector. Some themes that make the HVAC sector compelling for lenders include its predictable cash flow, strong culture of loyalty among the workforce, growth in green technology and energy efficiency, and their reach both in the commercial and residential landscapes.

Recent reports have also noted an uptick in merger and acquisition activity within the sector. For example, PE Hub looked into 80 private equity-backed HVAC deals in the past two years, reflecting a dynamic market landscape. This growing interest means contractors should be prepared for potential partnerships, acquisitions, or growth opportunities as PE firms continue to explore the sector’s potential.

CLOSING

The trades and HVAC trends for 2025 highlight just how much growth the industry is poised for, driven by strong market demand, persistent supply chain challenges, and technological innovation. Businesses that remain adaptable, embrace new tools, and meet evolving customer needs will surely be in the running for long-term success.