Where has Light Commercial Service Gone?by Mat Hattich (eff 1/15/16) on 07/23/13
Light commercial service makes up eighty percent of the HVAC service industry. Bay Area signatory contractors have reported significant losses in maintenance and service contracts in this sector over the last ten years. What is the cause of this precipitous drop? In speaking with some of the Bay Area’s most prominent mechanical contractors one factor stands out; cost. Contractors around the Bay have received letters from large and small chain account customers claiming the service they received was very good, however the increasing service rates exceed their allowable price point of $90-95 per hour. Why are signatory contractors raising their service rates? Well, a handful of Bay Area locals have received generous increases to their wage and benefit packages over the last decade. The increases have priced journey-level mechanics out of this light commercial market. What can we do to recapture this sector? Stay tuned. Meetings on this very topic are scheduled to take place in July and August and at the next scheduled California Oversight Committee meeting in September.