European HVAC installation companies: higher turnovers and fluctuation in order book developments

In Q3 2017, the HVAC installers in Poland and the Netherlands have the largest order books and German HVAC installers have the smallest order books. The turnover of the HVAC installers in the UK is set to increase. In Belgium the average order book is stable. In France there has been a stable increase since the recovery in 2015. Those are some of the findings of the Q3 2017 report of the European Mechanical Installation Monitor, theme: "Purchase Channels." The results of this research of USP Marketing Consultancy are based on 1,200 successful interviews with HVAC installers & plumbers in six European countries.

Methodology

For the order book developments USP Marketing Consultancy has asked the HVAC installation and plumbing companies about their current order book and for how many months they are able to keep their current staff working. The questions about the turnover developments are the following: 

  • If you compare your turnover of the third quarter of 2017 to the third quarter of 2016, how did your turnover develop? 
  • What are your expectations for the development of your turnover in the fourth quarter of 2017 in comparison to the turnover in the fourth quarter of 2016?

Poland: Highest order book & higher turnover after the disappointing Q1 2017

The order book of Polish installation companies is about 6.3 months. This has increased compared to the same period in 2016 (5.9). The start of 2017 was disappointing for the Polish installers as the share of those experiencing declining turnovers was higher than the ones who reported increase in comparison to Q1 2016. The situation in the following quarters, however, was much better as the installers who experienced increasing turnovers were on average 15% more than those who noticed decreasing turnovers than one year ago. Polish HVAC installers are also quite positive in their expectations regarding the turnover development in Q4 2017.

Order books in the Netherlands are increasing

The order books in the Netherlands have been increasing from 4.8 months in Q4 2016 to 6.1 months in Q3 2017. The whole construction and installation sector in the Netherlands is definitely on the rise. From Q3 2014 onwards the turnover developments have been clearly more positive. In the last quarter 56% of the HVAC installers and plumbers have experienced an increase of their turnover compared to Q3 2016. According to the expectations for Q4 2017, next quarter shall bring very similar results. 

France: After recovery, stable increase

In France the order book of HVAC installation companies is about 5 months. This is much higher than the previous quarter (3.9) but it should be noted that in general over the years the third quarter in France is always more positive than the rest of the quarters. In Q1 2016 the turnover balance (% installers who have experienced increase in the turnover – % installer who have experienced decrease in the turnover) in France became positive for the first time after the start of the project in 2014. After that recovery, a positive trend resulted in positive turnover balances in 2016 and 2017. The French HVAC installers expect that this trend will continue in Q4 2017.

Belgium overall very stable 

In Belgium the order books of HVAC installation companies are just like France-  about 5 months, and remain quite stable over the different quarters. The order books of Belgian HVAC installation and plumbing companies have been relatively stable for a long time. In Q3 2017 about 60% of the installation companies performed in line with 2016 and the companies who saw increasing turnovers was with 20% more than the ones who registered decrease in the turnover in comparison with Q3 2016. The expectations for Q4 2017 are rather positive, almost nobody expects a decrease in the turnover.

UK: No visible Brexit effect in 2017

The order book of the UK HVAC installers and plumbers in Q3 2017 is 4.5 months which almost the same as in Q2 2017. As a whole starting from Q2 2016 the UK order books remained relatively stable in the levels between 4 and 5 months, which are relatively lower than the order books registered before that period (an average 5.7 months). While in 2016 the installation sector seemed to experience some uncertainties, most probably due to the Brexit vote at that moment, the turnover of the installers in 2017 was higher than in 2016 and the expectations for Q4 2017 are also positive.

Germany: stable order books and turnover

German HVAC installers have the lowest order book (for between 3 - 4 months on average), which is mainly due to the fact that installers predominantly work on renovation projects. Regarding the turnover developments, the German installation companies either perform equally as one year ago or are growing in their turnover. For Q4 2017 a large majority of the HVAC installation companies expect that their turnover will remain the same as the same period last year. 

Conclusion

Regarding the order books, it can be said that in every country the size of the order book fluctuates around a certain level or number of months. In countries where there are relatively more new build projects, like Poland and the Netherlands, the order book is higher. In countries where there are more renovation projects, like Germany, the order book is lower, but stable. As a result of the growth in the construction sector in general, it is also visible that there is more work and a higher turnover for installation companies than in the years before. It will be interesting to see whether the reported decline in consumer purchase power and spending in the UK will have effect on the installation sector as well, as the country still finds itself in an uncertain situation due to the Brexit. 

Full report