ServiceTitan, a leading software platform designed to empower the trades, has published its second annual Commercial Service Report. This report highlights the current trends and market sentiment within the commercial industry for 2024, based on a survey of over 1,000 commercial contractors across various trades.
The survey reveals that despite economic challenges, contractors remain resilient, focusing on sales and marketing while adopting new technology to drive customer and business growth.
"Commercial contractors are essential to maintaining our critical infrastructure across North America," said Alex Kablanian, General Manager of Commercial & Construction at ServiceTitan. "These contractors have shown incredible resiliency, navigating formidable economic challenges in recent years. By adopting new technology, they are accelerating and achieving profitable growth. The contractors who leverage software and innovation now have the tools to reach new heights and greater potential than ever before."
Key Findings from the Report
Optimism for Growth:
- Despite market uncertainties, 39% of commercial contractors expressed optimism for 2024, a significant increase from the 22% who were positive about 2023.
- While revenue for 71% of contractors either decreased or remained the same in 2023, 67% are focusing on growing revenue in 2024. Other priorities include optimizing processes (33%), improving cash flow (30%), and retaining customers (26%).
Supply Chain Challenges:
- Ongoing supply chain issues continue to impact contractors, with 53% reporting difficulties in sourcing parts and 34% in sourcing equipment.
- Only 14% of contractors delivered more than 90% of their projects on time in 2023, and material and equipment lead times have increased for over half of the contractors.
Labor Shortages and Cost Management:
- Labor shortages (53%) and overhead costs (50%) are the top risks for contractors in 2024, followed by economic recession (49%), increasing material prices (35%), and access to working capital (26%).
- To attract and retain skilled workers amid labor shortages, 73% of contractors plan to increase technician salaries in 2024.
Adoption of Technology:
- The use of software is increasing, with 70% of commercial trade businesses adopting Field Service Management software. Many businesses use 4-6 different software providers to streamline operations.
- Investment in sales and marketing activities is set to rise, with 43% of businesses planning to increase spending in these areas in 2024.
The report indicates that while 30% of contractors aim to improve cash flow, there is room for improvement in operational efficiency, as 20% of contractors take more than a week to send invoices, and 33% of customer payments are more than one week late.
For a comprehensive review of the findings,
download ServiceTitan’s Commercial Markets Report.
About the Research
The research was conducted by Thrive Analytics on behalf of ServiceTitan, surveying over 1,000 commercial service contractors across various regions, business stages, and revenue levels. This information is provided for informational purposes only, and ServiceTitan makes no assurances regarding the accuracy of the survey data.
