By Lauren Setar
Like plumbing services, electrician service franchises are also used for both household repairs and product installation. Furthermore, with a greater household focus on technological advancements, modern homes require extensive and complex electrical distribution systems. As new markets emerge in response to technological change, specifically in the areas of telecommunications, data networks and computer cabling, the industry is projected to experience a significant increase in demand. Consequently, revenue for electrician service franchises is expected to increase at an average annual rate of 2.6 percent in the next five years to total $660.7 million in 2018.
With a greater focus on carbon dioxide emissions and global warming, federal and state governments have provided incentives for individuals to upgrade and replace existing heating, ventilation and air conditioning (HVAC) systems with newer, energy-efficient units. This government support is expected to continue in the next five years, increasing demand for industry services and boosting revenue for HVAC service franchises at an average annual rate of 4.3 percent to $2.6 billion.
Additionally, consumers with more money to invest in HVAC systems, either to install for the first time or to upgrade, are also expected to contribute to the rise in industry demand. With more HVAC systems being installed over time, the industry will also generate revenue through repairs, especially those that were postponed during the recession.
Due to the housing market collapse, home prices declined, and demand for housing-related products and services decreased as a result. But as the economy improves, with unemployment falling and incomes rising, more consumers will capitalize on these low prices and buy homes. As a result, home improvement franchises will benefit as consumers look to real estate renovations and repairs. Despite the housing market bubble bursting in 2007 and 2008, home sales have ticked up as foreclosed homes and dwindled savings forced prices down enough to entice buyers. Tax credits for buyers pushed consumers to purchase homes sooner and buyers have looked to make purchases before interest rates start to increase (which flow through to mortgage rates and home affordability).
Franchise operators in the housing market are expected to grow quickly over the next five years, due to the housing recovery, trends in environmental awareness and technological changes. Real estate purchases, renovation and repair are all specific areas that will benefit from increased home purchases. Overall, low interest rates are likely to keep buyer lending conditions positive, which will then stimulate greater demand for home purchases, renovations and repairs. As a result, these seven franchise industries will continue to grow at a rate that will outpace the domestic economy in the next five years.