North American HVACR average distributor sales for July 2011 increased 4.9 percent from the same month last year, a decline from last month’s 6.8 percent growth, according to the monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) report from Heating, Airconditioning and Refrigeration Distributors International (HARDI). July marked the fifth out of the last six months in which the annual distributor growth rate declined.

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The report showed growth in five of seven U.S. regions, only one that experienced double digit improvement compared to July 2010. Canada, however, had its best month of the year up over 10 percent, a sharp contrast to US distributor sales average of 4.8 percent.

Inventory levels were up in every North American region for the third consecutive month. Days Sales Outstanding (a measure of how quickly customers pay their bills) retreated under 50 days after five months of consecutive increases. Last month’s strong 30 percent increase in distributor productivity reflected by sales per employee backtracked by nearly 10 percent as July sales failed to meet distributor expectations.

\”The West Region has consistently reported weaker sales growth in 2011 than the other HARDI regions,\” said HARDI economic Andrew Duguay of the Institute for Trend Research. \”Home foreclosure rates in Arizona, California and Nevada are at more than 1 in every 300 homes, versus the 1 in 600 homes average for the US. We expect the diverse set of housing market dynamics across the US and Canada to continue to play a role in future distributor sales this year.\”

HARDI has already begun advising members to quantify the impact the $1,500 tax credit expiration last year had on fourth quarter sales since the fourth quarter is expected to significantly lag.