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Heating, Air-conditioning and Refrigeration Distributors International announced average U.S. HVACR distributor sales increased 11.6 percent in October, compared to a 4.7 percent decline in September. The gain was widespread, as evidenced in HARDI’s Monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) report.
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Six of the seven reporting regions posted growth in October, with the strongest results in the West and Southwest. Superstorm Sandy contributed to a slight sales decline for the Mid-Atlantic region, which ranges from Maryland to New Jersey.
October's results pushed the twelve-month rate of change to 3.9 percent, its highest level in three months. “This reflects the positive consumer trends, the rebounding residential construction market and general economic growth,” HARDI Economist Andrew Duguay said. “The growth rate continues to be constrained by the mild business-to-business spending and ongoing challenges in commercial construction markets.”
Days Sales Outstanding, a measure of how quickly customers pay their bills, also increased in October. “The DSO may have ticked up, but that is to be expected with the strong sales performance,” said Brian Loftus, market research and benchmarking analyst for HARDI. “The absolute DSO level remains in the modest and considerably improved territory versus where it was early last year,” he said.
“We are encouraged by the positive tone of the economic indicators in general, so expect the negative impact of Sandy to be brief,” Loftus said.