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North American HVACR Sales Down 12% in January

North American HVACR average distributor sales for January 2011 were down nearly 12 percent from December’s strong 17.4 percent average growth rate, according to the latest Monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) report from Heating, Airconditioning and Refrigeration Distributors International (HARDI).

The slowdown affirmed the association’s concerns about a post-tax-credit-slump following the 25c tax credit cap reduction from $1,500 to $500. The January 1, 2011 cap reduction also include the imposition of a “lifetime cap” barring previous credit recipients dating back to 2006 from claiming credits for additional energy efficiency improvements performed this year.

The running twelve-month sales improved for the sixth consecutive month as HARDI members continue to distance themselves from the recession’s trough. Two U.S. HARDI regions and Canada saw 2011 start with declines but the Western region, which had struggled through most of 2010, was not among them logging its third straight month of growth.

For the third consecutive month Average Days Sales Outstanding continued to decline falling much more in-line with distribution averages. Average distributor sales per employee, however, receded by almost 23 percent.

“January growth in excess of 5 percent is extremely positive to me and 2011 will be considered a good year if that number holds throughout,” said HARDI Executive Vice President and COO Talbot H. Gee. “2011 is going to be about getting back to basics and growing through better blocking and tackling; higher margin sales won’t be falling into anyone’s lap this year.”

A key factor in 2011 distributor growth and margins is likely to be the impact of “dry-shipped” R-22 residential units. HARDI is in the midst of developing a forecast and market watch for distributor sales of these products.

© 2019 Gale Media, Inc.

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