Currently, there is an overall sense of optimism among MEP trade professionals working in the mechanical, electrical and plumbing (aka, MEP) industry.
However, some issues persist, including supply chain constraints and especially the skilled labor shortages. Consumer trends also give insight into what’s potentially ahead in the next five years, in terms of both challenges and opportunities for the residential and nonresidential segments of the construction industry.
Trends and Disruptors in the MEP Industry
As you strategize for the future, here are some of the potential disruptors, constraints and trends impacting the MEP industry:
1. Skilled Labor Shortage in Construction
The MEP industry is not immune to the skilled labor shortage that’s currently affecting many businesses, and in fact, this shortage has lasted several years already. As it continues to color the outlook for construction companies, builders and remodelers, and specialty installers in the coming years, these Pros are seeking ways to be more efficient with their workforces and on projects—such as adopting productivity-tracking software—while also employing solutions for employee retention. With twice as many jobs in MEP trades as there are trained professionals to work them, many companies are implementing apprenticeships to appeal to and effectively train new employees.
2. Supply Chain Issues
Similarly, supply chain issues are nothing new and they won’t magically disappear in 2025. One example is the global semiconductor chip shortage. Another is the supply of refrigerants and related equipment to professionals when and where needed. This corresponds with the gradual decline of hydrofluorocarbons (HFCs) for cooling applications and the transition to A2L refrigerants. While contractors can’t control shortages or the allocation of necessary MEP supplies, there may be a higher drive to implement supply chain management software to help companies better manage their businesses.
3. Changes in Regulatory Requirements and Building Codes
Another trend we’re seeing that could potentially impact the MEP industry is changes in regulatory requirements related to electrical equipment and changes with carbon reduction and net-zero initiatives.
There has been an increase of state and local bans on natural gas, which will shift focus to the development of highly efficient heat pumps.
One example of this is the California Air Resources Board (CARB) announcing a comprehensive plan to ban the sale of natural gas heaters, furnaces and water heaters by 2030. As regulations and requirements such as these emerge over the next five years, it will force a shift for manufacturers, distributors, contractors, professional installers, DIYers and distributors.
In regards to codes, the 2024 International Plumbing Code (IPC) has brought about several changes for the MEP industry to enhance safety, efficiency, and sustainability of plumbing systems, including:
- Tracer Wire for Buried Plastic Sewer Piping: The 2024 IPC mandates the installation of tracer wire for buried plastic sewer piping, enhancing the ability to locate and identify these lines during maintenance or emergencies.
- Vacuum Testing Option for Drain-Waste-Vent (DWV) Piping: An option has been added to allow vacuum testing of DWV systems, providing an alternative method for verifying the integrity of these piping systems.
- Installation Standards for Solvent-Cemented Plastic Piping Joints: The 2024 IPC includes new installation standards for solvent-cemented plastic piping joints, ensuring more reliable and standardized connections in plumbing systems.
- Minimum Standards for Chemical Waste Piping Materials: The code introduces minimum standards for materials used in chemical waste piping, aiming to improve safety and durability in handling hazardous substances.
- Support for Buried Piping Beneath Buildings with Expansive Soil Conditions: New provisions have been added to support buried piping beneath buildings situated on expansive soils, addressing challenges related to soil movement and stability.
- Updates to Plumbing Fixture Requirements for Group I Occupancies: The 2024 IPC includes substantial updates to plumbing fixture requirements for various Group I occupancies, which encompass institutional facilities such as hospitals and correctional facilities.
- Testing Requirements for Plastic Pans Under Gas-Fired Water Heaters: Plastic pans installed beneath gas-fired water heaters are now required to be tested in accordance with ASTM E84 or UL 723 standards, ensuring they meet fire safety requirements.
- Shower-head Flow Limitation: The code limits shower-head flow to 2.0 gallons per minute, aligning with high-efficiency water usage standards.
The 2021 International Plumbing Code previously allowed for leak detection devices to be used with the approval of a code official, and home and business owners are adopting new practices, such as getting mobile notifications about water leakage.
Further, the 2024 International Mechanical Code (IMC) - which covers ventilation, exhaust systems, duct systems, combustion air, chimneys and vents, fireplaces and solid fuel-burning equipment, refrigeration, hydronic piping, fuel oil piping and storage, solar thermal systems, and boilers, water heaters, and pressure vessels - has also been released with impactful updates including:
- Refrigerant Updates: In response to the Environmental Protection Agency's 2021 rule mandating an 85% phasedown in HFC refrigerants over the next 15 years, the 2024 IMC permits the use of A2L refrigerants for human comfort applications. These low-GWP and low-flammability refrigerants are classified by ASHRAE as A2L and have different flammability characteristics than current A1 refrigerants like R-410A. The code includes requirements for refrigerant piping identification, machinery room specifications, and leak detection monitoring with alarm systems where the discharge from safety relief valves is not readily visible to occupants.
- Ventilation Requirements: The 2024 IMC increases outside air requirements for dwelling units to align with ASHRAE 62.2 standards, enhancing indoor air quality.
- Exhaust System Provisions: New requirements have been added for common ducts serving separate dwelling units, addressing shared ventilation systems in multi-unit building.
These changes to the building codes create a trickle down effect, especially among Pro customers, that are often facing higher product and project costs with the need to utilize compliant materials. These changes may also change how they complete the work and what kinds of subcontractors and trade specialists will be best suited for the job. Where Pros purchase materials is less likely to change as long as their preferred supplier has the compliant materials they need, based on our findings in the 2025 Building Products Customer Guide.
4. Green Plumbing Trends
Worsening water shortages in the western United States, increasing concerns about water quality, and a growing demand for solutions to deal with water conservation are also driving innovation and green plumbing trends. Various technologies, even including artificial intelligence (AI) and automation, are being used to digitize plumbing and help address growing concerns—and they present an opportunity for market growth in the coming years.
According to HIRI research regarding the State of the Smart Home, the percentage of homeowners purchasing smart water leak detection and humidity monitoring devices increased from 4% in 2017 to 6% in 2021. Further, the percentage of homeowners purchasing smart water flow meters and shut-off valve devices increased from 3% in 2017 to 5% in 2021.
Intent to purchase these devices remains high at 1 in 4 consumers, but adoption has remained low, signaling a need for product improvement in the category.
38% of smart water leak detection and humidity monitoring device purchases experience a technical problem with the product and has led to one of the highest return rates of smart home devices.
5. Eco-Friendly HVAC Trends
The plumbing sector isn’t the only segment working to bring to market alternative options.
Demand for energy efficiency and the push for better indoor air quality (IAQ) is also influencing the HVAC industry, leading to new building initiatives and renovation projects. The goal here will be to develop solutions and tools that reduce energy usage while simultaneously promoting health and safety.
As mentioned above, with the influx of natural gas bans across the country, companies will be seeking eco-friendly alternatives for heating, such as hydrogen fuel, and the U.S. Department of Energy’s Alternative Fuels Data Center can be a useful resource moving forward.
6. Freeze on the Infrastructure Investment and Jobs Act (IIJA)
The Infrastructure Investment and Jobs Act, or Bipartisan Infrastructure Bill, was signed into law in 2021, but with changes to the presidential administration has come pausing of disbursements towards IIJA initiatives and could mean more as 2025 progresses.
7. Inflation and Energy Costs
The price of raw materials has continued to rise by-in-large, which did persist into 2024 and is in uncertain territory in 2025. In response, we expect contractors and construction companies will be more likely to shop around for materials to reduce project costs while retaining top labor. These are affecting individuals, as well as companies, and influencing lifestyle changes that could create disruption for the MEP industry.
For example, many people are deferring new construction projects, and they might not be ready to do them right away. There had been an influx of demand for multifamily and build-to-rent housing, but this demand has slowed because of the number of BTR units being completed in 2025.
One cause behind the inflated price of raw materials is the rising rate of energy—and when that’s alleviated, we are likely to see those prices go down. But currently, all forms of energy—from oil and natural gas to electricity and liquified petroleum (LP) gas—are still more expensive than they used to be. As a result, there’s a pressing need for industrial manufacturers to develop and distribute equipment and individual components that can save energy, such as higher-efficiency systems and ECM circulating pumps.
8. International Tensions
While it’s hard to predict what will happen over the next five years with the geopolitical landscape, it’s clear that tensions globally are creating international ripple-effects are creating market uncertainty and causing disruption in the energy market, in particular.
9. Artificial Intelligence (AI), Automation and Augmented Reality
AI and automation extend beyond the plumbing sector. These technologies are also at work helping with better building decisions, automating the installation process, connecting home systems, increasing IAQ in residential and commercial buildings, and saving fuel. MEP companies can make time-consuming tasks more efficient using fabrication software and automate cutting tools. Augmented reality (AR) is also on the rise, to the benefit of both MEP contractors and their customers. By merging digital and real worlds, AR enables them to better visualize different stages of a construction project and work with more efficiency and clarity.
Planning for Future MEP Disruptors with Market Research
While you can’t control what regulations, innovations, occurrences and market challenges might shake the MEP industry, you can be prepared to deal with them by fostering resiliency and having the right data to work with.
Conducting customized market research with the help of our team at the Farnsworth Group enables you to gather meaningful market insights to inform you business strategies and prepare you for what lies ahead.
