Residential markets remain weak, and though June showed improvement, it was not enough to push second-quarter unit growth much beyond the low single-digit range, according to the Heating, Airconditioning and Refrigeration Distributors International on its Mid-Season HVAC Distributor Survey in partnership with JP Morgan Equity Research.

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More than 100 HARDI HVAC equipment distributors reported a generally sobering 2011 to-date with moderate expectations for the future.

Commercial, meanwhile, remains strong, with an improved assessment from distributors that reinforces upside potential, according to JP Morgan’s analysis of this year’s results.

Alan Beaulieu, HARDI's chief economist, however was less optimistic about commercial construction.

"There is some rate-of-change rise occurring and some stability in the dollar spend in commercial construction in general, but a sweep through the national data trends shows we will have to wait until late 2011 (best case) or into 2012 (more likely) before a sustained recovery takes hold,” he said.

Distributor members who participated in the survey received the results and full JP Morgan analysis two weeks ago. The report is now publicly available on HARDI’s website, www.hardinet.org/HVACSurvey. Some highlights of this year’s survey results include:

• 65 percent of distributors see 2011 residential demand flat or down compared to last year
• 95 percent of distributors are experiencing customers opting to repair vs. replace and 55 percent believe the repair rate is higher than last year
• 79 percent are reporting higher inventory levels compared to last year
• 67 percent of distributors indicate said they wanted to see the government ban R-22 “dry-shipped” units despite 11 percent of members anticipating these units to exceed 30 percent of their total unitary sales in 2011
• 95 percent of participants indicate a direct negative impact from the reduction in the $1,500 federal tax credits and 69 percent have seen a decline in 14+ SEER unitary sales
• 81 percent indicated a need for the federal government to provide additional incentives for HVACR retrofits

The survey goes into detail on Residential End Market Demand, Commercial End Market Demand, Inventory Levels, Raw Material and OEM Price Pressures, and Government Policy Measures.