The Electric and Gas Industries Association just released its 2026 HVAC Contractor Survey Research Report — compiled with market research firm Decision Analyst from responses by hundreds of HVAC contractors across the United States and Canada. It is the most comprehensive data-driven snapshot of residential HVAC contractor conditions available this year, and several of its findings should directly inform how contractors think about their businesses in the months ahead.

The report covers external threats, internal challenges, technology adoption, financing practices, brand and distributor loyalty, and expansion strategies. Here are the findings that matter most.

Top External Threats: Labour, Cost, Regulation

For the second consecutive year, labour shortages, increased costs, and government regulation ranked as the top three external threats facing HVAC contractors. The consistency with prior year findings is itself significant — these are not temporary conditions that contractors expect to resolve. They are structural challenges that are shaping how the most forward-thinking businesses are building for the medium term.

• Labour shortages: The technician shortage was the most frequently cited external threat. With the Bureau of Labor Statistics projecting more than 40,000 annual HVAC job openings through 2034, the supply of qualified technicians is not keeping pace with demand. Contractors are responding by building internal training programmes, increasing apprenticeship investment, and competing harder on compensation and workplace culture to attract and retain talent.

• Increased costs: Equipment, labour, fuel, insurance, and overhead costs have all increased materially since 2021. Contractors who have not systematically updated their pricing to reflect higher cost structures are seeing margin compression even when revenue is growing. The EGIA data reinforces what BDR's financial benchmarks show: the average HVAC business is running margins well below the top performers.

• Government regulation: Fuel choice battles, gas appliance bans, refrigerant phasedowns, efficiency standard changes, and labour law compliance represent a regulatory environment that is more complex than at any prior point in recent HVAC history. Contractors in affected markets are spending more time and money on compliance than their predecessors did.

EGIA's 2026 HVAC Contractor Survey, based on responses from hundreds of contractors across the US and Canada, identifies labour shortages, increased costs, and government regulation as the top three external threats — consistent with 2025 findings and reflecting structural rather than cyclical challenges facing the industry.

Brand Switching: Distributors and Equipment Under Scrutiny

One of the most commercially significant findings in the EGIA survey is that many contractors have already switched distributors or equipment brands — or are seriously considering doing so. The report found that relationships with distributor territory managers ranked as the most important factor in those decisions.

This finding has direct implications for both distributors and manufacturers. The contractor relationship is not with the brand — it is with the person who shows up, answers the phone, solves problems, and makes the contractor feel valued. Distributors that have changed territory managers frequently, reduced service levels during the market correction, or deprioritised smaller contractors in favour of volume buyers are seeing the consequence in switching behaviour.

For contractors evaluating their distributor relationships: the EGIA data validates that switching is more common than the industry typically acknowledges, and that the quality of the territory manager relationship is the primary differentiator. If your territory manager is not responsive, knowledgeable, and genuinely invested in your business, you have reason to evaluate alternatives.

Growing Interest in AI Tools

The EGIA survey found strong and growing interest in artificial intelligence tools among HVAC contractors, consistent with ACCA's 2026 technology adoption data. Contractors are actively evaluating and adopting AI for:

• Lead response and qualification: AI phone answering and chat tools that respond to leads within seconds — critical in a market where speed-to-lead is one of the strongest predictors of conversion

• Scheduling optimisation: AI-assisted dispatch that reduces drive time and increases jobs completed per technician per day

• Customer communication: Automated appointment reminders, follow-up messages, and review generation tools that maintain customer relationships without requiring manual attention

• Quote and proposal generation: AI tools that assist in generating professional proposals from field data, reducing the administrative burden on technicians and office staff

The survey also noted what ACHR News separately confirmed: AI adoption in HVAC is at a 'crawl, walk, run' stage — contractors are beginning with specific, measurable applications rather than wholesale technology transformation. The businesses getting the most value are the ones starting with one AI application, measuring the result, and expanding from there.

Multi-Trade Expansion: More HVAC Contractors Adding Plumbing and Electrical

The EGIA survey found a notable increase in the share of HVAC contractors who have expanded into plumbing and electrical services — or who are planning to. This multi-trade expansion trend reflects several converging pressures:

• Customer demand: Homeowners increasingly prefer single-provider relationships for home mechanical services. A contractor who can handle HVAC, plumbing, and electrical creates stickier customer relationships and higher lifetime customer value.

• Revenue diversification: In a market where HVAC installation volumes are soft, plumbing and electrical revenue offsets the volatility. Service-oriented trades businesses with multiple revenue streams are more resilient through HVAC market corrections.

• Heat pump installation requirements: Heat pump water heaters and whole-home electrification projects often involve HVAC, electrical, and plumbing work simultaneously. Contractors who can handle the full scope are better positioned for this growing category of work.

The multi-trade expansion trend also reflects the consolidation pressure from PE-backed platforms that already offer multiple trades under one roof. Independent HVAC contractors who can offer the same multi-service convenience — even at a smaller scale — defend customer relationships that might otherwise migrate to a larger platform.

Frequently Asked Questions

What did the EGIA 2026 HVAC Contractor Survey find?

The EGIA 2026 survey found that labour shortages, increased costs, and government regulation are the top external threats facing HVAC contractors. Many contractors have switched or are considering switching distributors or equipment brands. AI adoption is growing, and more contractors are expanding into plumbing and electrical services.

What is the most important factor in HVAC contractor brand loyalty?

According to the EGIA 2026 survey, the relationship with the distributor territory manager is the most important factor in contractor decisions about switching brands or distributors — outweighing price, product availability, and brand reputation.

Are HVAC contractors adopting AI in 2026?

Yes. The EGIA survey found strong and growing interest in AI tools among HVAC contractors, particularly for lead response, scheduling optimisation, customer communication, and proposal generation. Adoption is growing from a 'crawl, walk, run' starting point with contractors beginning with specific, measurable applications.

Why are HVAC contractors expanding into plumbing and electrical?

Multi-trade expansion is driven by customer demand for single-provider relationships, revenue diversification to offset HVAC installation volatility, the requirements of heat pump and home electrification projects, and competitive pressure from PE-backed multi-trade platforms.