How Many Competitors Do You Really Have? MSA Density for HVAC, Plumbing & Electrical

You're Not Competing Against Who You Think

Most contractor owners can name 5-10 competitors. The ones who show up at the same bids, the trucks they see on job sites, the companies their customers mention. The list you can name may be incomplete.

I pulled records from a commercial firmographic database, filtered to NAICS 238x (specialty trade contractors) with estimated revenue of $1-25M. The vendor name and pull date are not yet documented on this page. An earlier version cited a 494 million location figure; that is not a count of U.S. contractors and is not used in any number below. The result: 149,010 HVAC, plumbing, and electrical companies in Level's ICP alone. Broader specialty trades ($1-25M): 365,584 companies nationally, which equals the sum of the $1M-$5M, $5M-$10M and $10M-$25M rows in the revenue table below. Revenue and employee fields in firmographic files are usually modeled estimates, so treat every count on this page as an estimate, not a census.

The counts below show the wider pool of HVAC, plumbing and electrical firms in your metro. Your lost-bid log shows which of them actually compete with you.

The Top 25 Metros: Where Contractors Are Concentrated

Counts combine HVAC, plumbing and electrical firms; this table is not split by trade. In each metro the three revenue-tier columns sum to slightly less than the total (Phoenix: 3,975 + 339 + 105 = 4,419 vs. 4,445), and the source of that gap has not been documented. If you're an HVAC company in Phoenix doing $5-10M, the table shows 339 HVAC, plumbing and electrical firms in your revenue tier. That is not 339 HVAC competitors, and some of those firms never bid your kind of work. The same metro also has 3,975 smaller firms and 105 larger ones with more resources. Operator check: sort your lost-bid log for the last 12 months by winning competitor and count the distinct firms that actually beat you. That count is your working competitive set.

What the Revenue Tiers Tell You

The revenue distribution across all specialty trades follows a predictable pyramid:

The jump from $5M to $10M is brutal: about 87% of companies in the $1-25M range are below $5M (317,415 / 365,584 = 86.8%). If you've crossed $5M, you're larger than about 87% of the $1-25M specialty-trade firms in this file. That is a size comparison, not proof of stronger profit or bid performance. But the companies in the $5-10M range all face the same challenge: they're too big for the owner to manage everything personally, but too small to afford the full infrastructure (CFO, controller, project controls) that $25M+ companies take for granted.

This is the messy middle. And it's exactly where financial discipline separates the companies that grow from the ones that plateau or contract.

The Age Factor: Your Competitors Aren't Going Anywhere

The average contractor in Level's ICP with a recorded founding year has been operating for 26 years. Chicago's average is 32 years. St. Louis: 34 years. Detroit: 32 years.

The age table covers 111,626 firms, about 75% of the 149,010 ICP count (111,626 / 149,010 = 74.9%). The remaining records likely lack a founding year, but that has not been confirmed. Shares below are of the 111,626 firms, not of all 149,010.

64.7% of the firms with a founding year on file have been in business for 16+ years (35,155 + 37,105 = 72,260 of 111,626). These aren't fly-by-night operations. They have established relationships, repeat customers, and brand recognition. Competing on reputation alone doesn't work when your competitors have 20 years of it.

What does work: knowing your numbers better than they do. Many long-running companies still run on the financial setup they built years ago: QuickBooks Desktop, a part-time bookkeeper, and the owner's bank balance as the primary dashboard. We have not measured how common that is in this dataset, so treat it as a pattern to test, not a statistic. That's sufficient until it isn't, and a contracting market is when it stops being sufficient.

What Density Means for Your Pricing

High competitive density drives two pricing dynamics:

1. Pressure on bid margins. An MSA with 4,000+ HVAC, plumbing and electrical firms in this cohort can contain many businesses that never bid your work. Check the actual competitors in your lost-bid log before assuming every listed firm competes on price. If you don't know your true job-level margins (check the missing-cost traps), you can't tell the difference between a tight-but-profitable bid and one that loses money.

2. Premium pricing requires differentiation. The contractors who charge top-quartile bill rates ($116/hr+, the 75th percentile of company-level average billed labor rate across 1,770 cross-trade contractors in the Level Index; the rate-card field is used inconsistently, so neither its level nor spread establishes comparable market pricing) in high-density markets may need to offer differentiated value, such as speed, reliability, specialization, or service agreements that lock in repeat revenue. Level Index quote-line data (2.2M+ quote line items) shows labor margins (47.7%) well above materials margins (31.5%). These are quoted line-item margins, not realized job margins. Match actual costs and the full job mix before concluding that shifting toward labor raises profit.

In dense markets, better financial visibility can support accurate bids on the jobs worth taking and disciplined decisions to walk away from jobs that would lose money. Our quote conversion data shows the median contractor wins 73.9% of decided quotes (won / (won + lost), 794 contractors with at least 20 decided quotes; pending quotes excluded), but the question is whether they're winning the right ones.

The Permit Volume Overlay

Competitive density matters more when combined with permit volume trends. Here's what our files show for five large states. The permit source is not named on this page, and the state company counts have not been reconciled to the national cohort, so read the warning below the table before using it:

Read this table as a data-quality warning, not a competition ranking. Working backward from the ratios gives the permit count each state must have in the underlying file: Florida 26,390 / 13.6 x 1,000 = about 1.94 million permits, California about 1.93 million, Texas about 1.02 million, Georgia about 308,000 and New York about 71,000. The roughly 27-fold spread between Florida and New York cannot be explained from the published table alone. It does not establish a difference in competitive pressure; jurisdiction coverage, permit types and company filters must be reconciled before choosing an explanation. The five state company counts also add up to 146,193, almost the entire 149,010 national HVAC, plumbing and electrical cohort, so the state population also needs reconciliation. Until the permit source, its coverage and the company filter are documented and reconciled against a primary source such as the Census Bureau Building Permits Survey, do not use these ratios to compare states. Treat the year-over-year declines as unverified as well. Operator check: from your county or city permit portal, count the last 12 months of the permit types you actually bid, such as residential HVAC change-outs or commercial tenant improvements. Compare that count with the number of licensed firms in your trade in the same jurisdiction. A ratio with matched geography and permit type is the one worth tracking.

What to Do About It

Understand your competitive position. The Level state benchmarks compare reproducible labor, building-stock, serviceable-demand, and employer-firm measures across all 50 states plus DC.

Track the market trend. The Market Growth Report shows YoY permit trends for your state and trade.

Know your unit economics. In a high-density, contracting market, the winners are the ones who know their real job margins, collect faster than median, and manage overhead tightly.

Use service agreements as a moat. We have previously cited an average of $6.3M in revenue for companies with SAs vs. $1.3M without. No population or definition is stated for that figure here. Even if it holds, it is an association: larger companies are more likely to run SA programs, so it does not show that SAs cause growth. Compare within a revenue tier before drawing conclusions. SAs do create recurring revenue and customer stickiness, and they open add-on sales opportunities. At the median, measured pull-through is far below the agreement value itself. In the Level Index, additional repair, replacement and project revenue from SA customers has a median of 8.7% of annual SA revenue (25th to 75th percentile 1.5% to 29.6%, 90th percentile 93.4%; 386 cross-trade companies). The SA program itself earns a median 37.9% gross margin (259 companies with at least $10K of SA revenue).

Consider the PE lens. PE platforms have been active buyers of contractors since 2022. We have not cited a named deal database for a count, so we don't state one here. They're looking for companies with clean financials, diverse customer bases, and strong unit economics. If you want to be acquirable (or just want to run like you are), the financial infrastructure matters now more than ever.

FAQ

How do I find out exactly how many competitors I have in my metro?

Our metro building market covers 100 metros with commercial building stock and scoped Census County Business Patterns counts for plumbing and HVAC locations. The published method names the denominator and limitations beside the figures. Census County Business Patterns counts establishments, so those figures will not match the firmographic company counts in the table above.

Is high density always bad?

No. Dense markets can also have more demand; check local permit and bid volume. Los Angeles has an estimated 7,310 firms in this cohort, but the count alone says nothing about how much work there is. The issue isn't density alone, it's density relative to the work you actually bid. When permits for that work decline in your jurisdiction, the density-to-work ratio shifts against you. Check your local permit portal to see which direction it is moving.

What's the optimal number of competitors?

There isn't one. What matters is whether you can differentiate on something other than price. Strong service agreement programs, quote conversion and billing speed are measurable operating levers to test. Separate distributions do not establish joint outperformance or a causal lift in every competitive environment.

How does this data relate to the Level Index benchmarks?

The Level Index benchmarks operational and financial KPIs (margins, collection rate, billing speed, billing capture) from a research universe of 2,242 contractors ($13.25B in job revenue analyzed) studied by the Level founding team across operating, private-equity and CFO roles, not a count of Level customers. Each metric has its own sample size, for example 464 contractors for collection rate and 733 for billing speed, so check the n beside each figure rather than relying on one total. The market density data comes from different sources, building permit records and commercial firmographic records, which are not yet named on this page. Together they give two views: how competitive your market is (density) and how competitive your business is (operations).

Where does the company age data come from?

Company firmographic sources track the founding year for businesses in the dataset. The NAICS 238x (specialty trade contractors) $1-25M pool contains an estimated 365,584 companies; 149,010 is the HVAC/plumbing/electrical subset. The field used to select that subset is not yet documented. The 26-year average covers companies in that cohort with a founding year on file (111,626 in the age table), not all 149,010.