NAICS 238220 Quarterly Industry Report
Plumbing, Heating, and Air-Conditioning Contractors
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 238220Sector: Construction (23)Updated: Q1 2026
About This Report
This industry profile for Plumbing, Heating, and Air-Conditioning Contractors (NAICS 238220) draws on data from the U.S. Census Bureau[5], Bureau of Labor Statistics[6], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, mechanical trade analysts, and specialty construction investors with current market data. All quantitative claims are sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the plumbing, heating, and air-conditioning contractors industry.
Industry Definition & Overview
Plumbing, Heating, and Air-Conditioning Contractors (NAICS 238220) encompasses establishments primarily engaged in installing and servicing plumbing, heating, and air-conditioning equipment per the U.S. Census Bureau[4]. Contractors provide both parts and labor when performing work. Activities include water supply piping, drain-waste-vent system installation, gas piping, hydronic heating, forced-air furnace and heat pump installation, central air conditioning, ductwork fabrication and installation, refrigeration equipment, and fire sprinkler system installation. Work performed includes new construction, additions, alterations, maintenance, and repairs.
Roughly 88,738 firms employ over 1 million workers with $75.3 billion in annual payroll in a market valued at about $158 billion per Census Bureau[5] economic survey data. Average hourly wages reach $38.83 per Bureau of Labor Statistics[6] data. Plumbing-Heating-Cooling Contractors Association (PHCC), founded in 1883, represents roughly 3,300 member firms and 65,000 technicians. Residential service and replacement work generates steady revenue, while commercial new construction and tenant improvement projects drive larger contract values. Energy efficiency upgrades, heat pump adoption, and building decarbonization mandates represent current growth drivers.
Per the SBA Table of Size Standards[7], the size standard is $19 million in average annual receipts. International Plumbing Code (IPC) and International Mechanical Code (IMC) establish installation standards adopted by most U.S. jurisdictions. OSHA[8] construction safety standards under 29 CFR 1926 apply to all plumbing and HVAC work, with confined space entry, torch and soldering burns, and refrigerant exposure representing key safety hazards. State plumbing and mechanical contractor licensing requirements mandate journeyman and master licenses for individuals, with contractor licenses required for firms. EPA Section 608 certification is required for technicians handling refrigerants.
What's Included in This Industry
- Water supply and distribution piping installation
- Drain-waste-vent plumbing system construction
- Natural gas piping and appliance connection
- Forced-air furnace and heat pump installation
- Central air conditioning system installation
- Ductwork fabrication, installation, and sealing
- Commercial refrigeration equipment installation
- Fire sprinkler system installation and testing
- Hydronic heating and radiant floor systems
- Plumbing and HVAC service, repair, and maintenance
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Construction | 23 |
| Subsector | Specialty Trade Contractors | 238 |
| Industry Group | Building Equipment Contractors | 2382 |
| NAICS Industry | Plumbing, Heating, and Air-Conditioning Contractors | 23822 |
| National Industry | Plumbing, Heating, and Air-Conditioning Contractors | 238220 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 238210 | Electrical Contractors and Other Wiring Installation Contractors | Electrical Contractors coordinate wiring installations with plumbing and HVAC contractors, with furnaces, air conditioners, heat pumps, and water heaters requiring dedicated electrical circuits and control wiring that electricians install while mechanical contractors position and connect the equipment |
| 238290 | Other Building Equipment Contractors | Other Building Equipment Contractors install elevators, conveyor systems, and building automation components that interface with HVAC and plumbing systems, with equipment room ventilation, condensate drainage, and utility connections requiring coordination between mechanical and building equipment trades |
| 238310 | Drywall and Insulation Contractors | Drywall and Insulation Contractors close wall and ceiling cavities after plumbing and HVAC rough-in is complete, with drywall installation sequenced after mechanical inspection approval to allow access for corrections before interior finishes are applied |
| 238130 | Framing Contractors | Framing Contractors build the wall, floor, and ceiling structures through which plumbers and HVAC installers route pipes and ductwork, with framing layout including provisions for pipe chases, duct soffits, and mechanical equipment platform framing |
| 236220 | Commercial and Institutional Building Construction | Commercial and Institutional Building Construction manages projects where plumbing and HVAC contractors represent one of the largest subcontract scopes, with mechanical system installation spanning the full project timeline from underground rough-in through equipment startup and commissioning |
| 236115 | New Single-Family Housing Construction (except For-Sale Builders) | New Single-Family Housing Construction generates residential plumbing and HVAC installation demand, with every new home requiring complete plumbing supply and drainage systems plus heating and cooling equipment installation by licensed mechanical contractors |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 10.5% | 11,686 |
| 2 | Florida | 8.4% | 9,353 |
| 3 | Texas | 8.1% | 8,966 |
| 4 | New York | 6.3% | 7,061 |
| 5 | Pennsylvania | 3.7% | 4,154 |
| 6 | Illinois | 3.7% | 4,070 |
| 7 | North Carolina | 3.6% | 3,973 |
| 8 | New Jersey | 3.1% | 3,454 |
| 9 | Georgia | 2.8% | 3,101 |
| 10 | Massachusetts | 2.8% | 3,069 |
% Of Establishments
0%
11%
Source: County Business Patterns, U.S. Census Bureau[2]
SBA Lending Summary
1,406
Total SBA Loans
$626.7M
Total Loan Volume
$446K
Average Loan Size
11 yrs
Average Loan Term
10.26%
Average Interest Rate
12,942
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[3]
Key Insight: Per the SBA Table of Size Standards[7], Plumbing, Heating, and Air-Conditioning Contractors (NAICS 238220) has a size standard of $19 million in average annual receipts for federal contracting purposes. SBA lending programs[9] support equipment purchases, vehicle fleets, and working capital for qualifying plumbing and HVAC contracting firms. Eligible businesses can access SBA 7(a) loans[10] for working capital, equipment, and acquisition financing, while 504 loans[11] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 59 | $60.2M | $1.0M |
| 2 | First Internet Bank of Indiana | 26 | $38.8M | $1.5M |
| 3 | The Huntington National Bank | 112 | $38.5M | $343K |
| 4 | Northeast Bank | 144 | $28.8M | $200K |
| 5 | Newtek Bank, National Association | 53 | $22.4M | $422K |
Frequently Asked Questions
Common questions about this industry.
What is the NAICS code for plumbing and HVAC contractors?
NAICS 238220 covers plumbing, heating, and air-conditioning contractors performing pipe installation, furnace and AC systems, ductwork, fire sprinklers, and mechanical service work per the U.S. Census Bureau[4].
What is the SBA size standard for HVAC contractors?
The SBA size standard[7] is $19 million in average annual receipts, determining eligibility for federal small business contracting programs and SBA lending products.
How large is the plumbing and HVAC industry?
Roughly 88,738 firms employ over 1 million workers with $75.3 billion in annual payroll per Census Bureau[5] economic survey data, making plumbing and HVAC contracting one of the largest specialty trade classifications in the construction industry.
What codes govern plumbing and HVAC installation?
International Plumbing Code (IPC) and International Mechanical Code (IMC) establish installation standards adopted by most U.S. jurisdictions, with state and local amendments adding jurisdiction-specific requirements for plumbing materials, equipment efficiency, and installation methods.
What licensing do plumbers and HVAC technicians need?
State requirements mandate journeyman and master plumber or HVAC licenses for individuals, with EPA Section 608 certification required for technicians handling refrigerants per EPA[12] regulations governing ozone-depleting and greenhouse gas refrigerant management.
What industry association represents plumbing contractors?
PHCC (Plumbing-Heating-Cooling Contractors Association) founded in 1883 represents roughly 3,300 member firms and 65,000 technicians per association data, providing legislative advocacy, education, and apprenticeship training programs for the plumbing and HVAC trades.
What is driving HVAC industry growth?
Heat pump adoption, building energy efficiency upgrades, indoor air quality improvements, and municipal decarbonization mandates represent current growth areas per Census Bureau[5] construction spending data, with federal tax credits under the Inflation Reduction Act supporting residential and commercial HVAC equipment upgrades.
What safety hazards exist in plumbing and HVAC work?
OSHA[8] safety standards apply to all mechanical work, with confined space entry in utility tunnels, burns from soldering and brazing operations, refrigerant exposure, and trench cave-ins during underground piping installation representing the primary occupational safety hazards.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Census Bureau, Economic Census census.gov
- [2]U.S. Census Bureau, County Business Patterns census.gov
- [3]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [4]U.S. Census Bureau census.gov
- [5]Census Bureau data.census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA Table of Size Standards sba.gov
- [8]OSHA osha.gov
- [9]SBA lending programs sba.gov
- [10]SBA 7(a) loans sba.gov
- [11]504 loans sba.gov
- [12]EPA epa.gov
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