Candian Hvac Industry Analysis

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Industry Analysis

The Canadian Mechanical Services industry includes companies involved in the repair and installation of HVAC, electrical and plumbing equipments as well as metal fabrication services. Companies in this industry primarily include contractors and sub-contractors servicing residential, industrial and commercial clients with heating, cooling, insulation, ventilation services. As of 2009, there were over 1000 private companies registered with the Mechanical Contractors Association of Canada out of which approximately 300 companies are located in Ontario[1]. COMPETITIVE LANDSCAPE

The demand for mechanical services depends partly on new residential and commercial construction. Demand for maintenance and repair work on existing structures is also substantial. Profitability depends on the volume of work a company can acquire, since most costs are fixed. Larger companies may have a competitive advantage in winning projects that require both design work and installation and in serving businesses with facilities in multiple markets. Small companies can compete by specializing in individual markets and by focusing on customer service. The key factors on which purchasing decisions are made include :- (i) competitive price, (ii) long-term customer relationships, (iii) quality, timeliness and reliability of services provided, (iv) an organization’s perceived stability based on years in business, financial strength, and access to bonding, (v) range of services provided, and (vi) scale of operation.

Critical factors affecting industry

1. Economic stability- General economic, credit and capital conditions can adversely affect the financial performance of companies. Access to financing sources is a critical success factor since majority of the projects are long term leaning towards uncertainty and fixed costs represent substantial portion of the budget. The liquidity of markets dictate the ability of the companies to take on various projects...
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