- INDUSTRY INSIGHTS
3 Trends That Will Impact the Elevator Service Industry This Year
If the last two years are any indication of what this year will look like, we can expect there to be plenty of unexpected changes still to come. Let’s take a look at three ongoing trends that are likely to have a huge impact on the elevator industry over the coming year.
We expect to see investment in new construction projects—which has been heavily skewed toward residential projects over the past year—begin flowing into non-residential projects more freely. This expected pivot toward public, private, and commercial properties means newer and more complex technologies will play a much larger role in the months ahead.
Government Spending Will Balance an Uneven Building Boom
We have seen a spike in construction over the past year as builders across the U.S. continue working through a years-long backlog of projects. The majority of this building frenzy, however, has been focused on residential construction. New legislation such as the $1.2 trillion Infrastructure Investment and Jobs Act will bring a much-needed boost to the non-residential construction sector.
Deloitte has reported overall construction spending has recovered and is 12% higher than pre-pandemic levels, reaching $1.57 trillion in July of 2021. The picture is much different, however, when we look at each segment individually. While residential construction spending has increased to almost 30% above 2019 levels, reaching $770 billion in July, non-residential spending fell 11% below where it was at the start of the pandemic.
The injection of billions of dollars into major infrastructure projects, including airports, public transportation, and rail networks—as well as the inclusion of tax incentives that promote private investment—means we are likely to see much more activity in the non-residential sector throughout this year and beyond.
The increase in non-residential construction means we will see more freight, maintenance, and emergency evacuation elevators being installed. Professionals in the elevator service industry need to have a plan for this changing landscape so their sales teams are prepared to land these commercial service contracts as they come up.
Emerging Technologies Will Drive Demand for Elevator Modernization
Advancements in vertical transportation technologies have made it possible to deploy elevators that are safer, more energy-efficient, and even suitable for occupant evacuation during emergencies. We will continue to see rising demand for elevator modernization projects as building managers continue to see the value of these new technologies far outpace their costs.
A report by IndustryARC projects that the market for elevator installation and modernization will reach $106.2 billion globally by 2026—a CAGR of 5.3%.
The report goes on to highlight two key factors driving this trend: an increase in spending on infrastructural activities across the commercial sector, including hotels, office buildings, data centers, and warehouses, and an increase in smart, green, and safety technology, such as internet-connected devices, solar power, and the aforementioned emergency evacuation elevators, just to name a few.
Sales reps who have access to data to identify each property’s specific situation and present their customers with the cost and safety benefits of modernizing their elevator systems will be at a distinct advantage over their less-informed counterparts.
And for elevator service professionals, there may be no better time than right now to revisit current clients (and win new clients). As property managers upgrade their elevator equipment, they will need to review their current service contracts as well. Companies with the capabilities to service and maintain modern elevator equipment will be in a great position as these service contracts come up for review.
Predictive Analytics Will Enable Elevator Service Companies to Punch Above Their Weight
As connected elevators and other intelligent infrastructure solutions become more prevalent, we will see an increase in smart elevator systems. The game-changer for service techs and facilities managers will be systems that measure usage to predict wear and tear and allow for more efficient elevator upkeep.
Meeting the service and maintenance needs of traditional elevator systems meant that maintenance contracts were designed based on static variables, such as age and type of elevator, combined with inflexible estimates of usage. In addition to the regularly scheduled servicing, elevator service providers also had to conduct highly expensive and disruptive unscheduled repairs. Intelligent elevator systems allow for more precise tracking of service needs, enabling more flexible and efficient use of resources.
In a use-case report from Huawei, the authors identify two key data types that will have the largest impact on predictive maintenance: system data, which is data gathered from sensors and interfaces about the health and performance of the elevator, and user data, which is data generated about the elevator’s users and usage patterns.
As smart devices continue to improve, elevator service companies can apply user data and predictive analytics to identify patterns and outliers in the system. With this strategy, your company can rethink how you deploy critical assets and technicians, as well as how you design service contracts.
The effect of predictive analytics on maintenance and service will be especially great in the elevator industry where, like many heavy equipment industries, the value of maintenance and service contracts can far outweigh the value of equipment sales and installation. For example, Otis—the world’s largest manufacturer of elevators—said in its 2021 Q3 investor report that more than 80% of its overall operating profit came from maintenance, repair, and services contracts.
Stay Ahead of the Curve with Convex Property Insights
As the saying goes, “the only constant in life is change.” If you want to stay ahead of the market—and your competition—you need to be able to identify trends as they happen.
The Convex suite of commercial services solutions gives your sales and marketing teams all the information you need to see exactly what is happening in your target area. Use Convex’s pipeline generation and management software to see property details and combine it with data from our property and market intelligence solutions to create the most accurate picture of your market opportunity.
To learn more about how Convex can help take your business to the next level, schedule a demo today.
Ellin McHarg is Principal Copywriter at Convex.
Originally published on April 18, 2022 Updated on October 3, 2022