Summary of Research Findings

This research was a corporate questionnaire to 89 domestic major companies undertaking that undertake installations of building systems, particularly HVAC and sanitary systems. The sales of HVAC and plumbing/sanitary works for FY2019 (total sales at 89 major HVAC and plumbing/sanitary works contractors) attained 1,427,600 million yen, 104.9% of the size of the previous fiscal year. The companies favorably received the domestic orders for HVAC and plumbing/sanitary works, which expanded the market size. However, as the demand for installation works for Tokyo Olympic and Paralympic Games have overall done, the growth has slowed down. The market seems to have peaked out in FY2019 for the moment.

In 2020 when the COVID-19 infections spread, the orders from accommodations and other related facilities for foreign tourists started being affected by the infections. While the installation orders that had already started the works by April 2020 were able to go on as planned, some orders planned after April were postponed or suspended, according as the clients intended. Furthermore, there were period of voluntary restraint after the state of emergency was declared, which decreased the orders of multiple small-size works that should have been an opportunity for sales activities. These factors are considered to press down the sales performance after the latter half of FY2020.

Noteworthy Topics

Decreased Installation Works in COVID-19 Calamity Deterred Unilateral Rise of Costs for Equipment and Labor

In addition to constant shortage of workers, increased demand by Tokyo Olympic and Paralympic Games caused rapid increase in the orders for installations, which led the companies undertaking the installation works for HVAC and plumbing/sanitary equipment to be totally at a loss to secure manpower for construction and installation works that need specific skills.

However, the COVID-19 calamity brought about the changes in the supply-and-demand balance, which temporarily eased the issue of manpower shortage, retaining the labor cost to stay flat at a high level and averting unilateral rise of the cost. This, however is caused by the special factor i.e. COVID-19 infections, and no basic solutions have been provided. Therefore, the issue of manpower shortage is likely to become obvious once again after the infections are subdued. Currently, price negotiations by the HVAC and plumbing/sanitary works contractors to the clients have become scarce, though they used to frequently carried out at the time when personnel expenses were ever rising.

Research Outline