Heating, Air-conditioning & Refrigeration Distributors International (HARDI) released its monthly TRENDS report, showing the average sales performance by HARDI distributors increased 35.1% during November.
The average annual sales growth for the 12 months through the month is 23.3%.
“During the past ten years there have only been four months when sales growth was in the 30s and all four were this year,” said HARDI Market Research & Benchmarking Analyst Brian Loftus. “This month was helped by being compared to a prior year that was unusually warm, it had an extra billing day, and was passing through the extraordinary price increases on top of the strong underlying market demand. It’s been quite a year.”
The Days Sales Outstanding, a measure of how quickly customers pay their bills, was 43.5 days at the end of November.
“The monthly DSO this month was a bit better than last year,” said Loftus. “The pre-pandemic norm for November was in the 48 to 49 day area.”
HARDI says the record sales growth is a result of “strong end market demand and the pass through of the extraordinary price increases.” The Producer Price Index for Primary Air Conditioning, Forced Air Heating and Refrigeration products increased by 12.6% through October 2021, while the median PPI increase across the past 10 or 20 prepandemic years was only 2%., Loftus said.
“COVID and inflation concerns have slashed consumer sentiment, but it is not showing up yet in end market demand,” he said. “Inventories for our industry, whether you look at the TRENDS report or the Wholesale Trade report, are improving and that is probably helping with the continued strong current demand and getting an early start on preparing for next year.”