Contractor Accounting Trends Q4
Entering 2026, we will take one final look back at the 2025 trends as we close out our Q4 and start gearing up for tax time. Much like in our prior quarters, we will look at each industry and the trends or observations we see across the financials. Today, we will discuss trends in HVAC, electrical, plumbing, handyman, and other luxury trades, such as cleaning and landscaping. As usual, there were many environmental factors that affected these trades, so, of course, there will be regional differences.
HVAC Financial Trends & Q4: Missing the Cold
While the mild winter is great in some respects, when it comes to revenue from heater repairs, we see the opposite. Across the Midwest and Southeast, it has been a very mild winter, with some splashes of cold that do not seem to last.
This means HVAC is seeing a continuation of what we have seen through 2025: a year-over-year sales slowdown. Customers seem to be moving away from full replacements or installations and instead pushing for repairs and service for older units. This explains some of the reasons sales are low as well.
In our “tax credit blog here”, we recommended some marketing tactics on the new units because of a loss of energy credits in 2025. There was some traction in sales of installs here, as we saw people either getting units before the new refrigerant and heat pump requirements or homeowners who wanted to take advantage of the final extra tax credits.
Plumbing & Electrical Financial Trends: Steady Year over Year
Plumbing services and electrical often see slow Decembers because of the holidays, but the rush time to prepare for those holidays in October and early November had a decent spike in work. Likely, people are trying to fix household issues before the holidays and all the family visiting. Unlike HVAC, plumbing, and electrical systems, which seem to have stayed the same year over year. While this is not the growth we hoped for, we are not seeing a decline.
Handyman and Luxury Trades Trends; Holiday Boost
As we usually do see in Q4, there was a massive uptick in handyman and interior cleaning services. As with the small spike in plumbing and electrical work, the holidays boost these two trades. With family visiting, holiday parties to host, and the overall goal of starting the new year fresh, small home repairs are no longer put off, and the sudden rush to find someone to help you clean is upon the customer.
For luxury trades such as landscaping and exterior washing, winter has never been a big seller. Q1 prep for spring will help bring those two trades back to life.
Custom Homes Financials & Federal Reserve
Q4 brought the start of a rebound in custom home building. More people are interested in buying custom homes, likely in response to the Federal Reserve lowering interest rates, which is allowing the housing market to open up a bit more. It is very dependent on where you live, of course. The Southeast and Midwest are showing signs of improvement.
The great news with this development is that the revenue from custom homes will trickle into our other trades. HVAC, plumbing, and electrical business owner’s should see growing demand and revenue increases if the custom home building industry begins to grow.
2026: Trend Estimates
We are trending to have a lot more tightness in people’s wallets and less desire to spend. The economic situation is not one where people are likely to start spending without really planning out their budgets. HVAC has been highly weather-dependent and price-conscious, which will be exacerbated by more expensive new units and the lack of energy tax credits.
There are already fewer installs going into the new year. To combat this, make sure your HVAC company offers a wide range of units, not just high-end models. I would make sure to keep a pulse on the inventory situation of not just entry-level but also unlisted non-popular brand units.
Electrical and plumbing should also prepare to focus on the repair-and-service side of the business, rather than hunting for large jobs like full rewiring. Something all industries should be looking into is pairing with a consumer financing company/. Make sure you account for any financing rates you may be passing on to the client, or, if you want to sell using 0% financing, make sure your pricing reflects that additional cost.
Luxury trades are usually on hold during Q1 as people don’t tend to get to their spring cleaning or extra projects until April, when they see a tax refund.
Overall, our recommendations for 2026 are to keep a pulse on your expenses. Make sure your labor costs are in line with the jobs coming in. Offer many options to your customer base so you can offer a wide variety to meet customer expectations. Fill in gaps with small jobs, even if it is not something you would prefer to do.
Waterford strives to ensure that not only our clients but all home service contractors have access to knowledge about their accounting and bookkeeping. We do these blogs and YouTube videos to share that knowledge.
If you see something you want more information on,å or a concept that you do not understand. Please never hesitate to reach out to us via email at info@waterfordbusiness.com or call our main line at 864-351-0852.
