Average sales growth for Heating, Air-conditioning and Refrigeration Distributors International reporting distributor members increased 7.3 percent in July after a gain of 5.9 percent in June, according to HARDI’s latest TRENDS report.
The strongest growth continues to be in the Mid-Atlantic region and the Western region, which have generated double-digit annual growth rates. The overall annual growth rate has been in the 5 percent to 6 percent range since the spring and closed out July at the lower end of that range, at 5.2 percent. Weather appears to have played a role in the July results.
“During the month there were fewer cooling days than average in the Midwest and South, while the West, Mid-Atlantic and Northeast were warmer than normal,” said HARDI Senior Economist Andrew Duguay. “Consumers are spending at a stable rate, neither rapidly increasing their spending with the housing value recovery nor lowering their spending despite higher payroll taxes. That is one reason the annual growth rate is maintaining the horizontal trajectory that has been in place for most of 2013.”
“The Days Sales Outstanding, a measure of how quickly customers pay their bills, continued their normal seasonal pattern,” said HARDI Market Research Analyst Brian Loftus. “The DSO declined again in July and is very close to where it was last July. The annual trough has been late summer in the mid-40’s these past two years while the economy has been recovering.”
“Retail sales are stable right now with a 2.8 percent annual growth, but disposable personal income has barely increased with only 0.6 percent growth during that period while inflation has increased 2 percent,” Duguay said. “This trend is not sustainable. Unless we see significant improvements in the employment and wage growth trends, consumers will likely cut back on their spending.”
HARDI members do not receive financial compensation in exchange for their monthly sales data and can discontinue their participation without prior notice or penalty. Participation is voluntary, and the depth of market coverage varies from region to region. An independent entity collects and compiles the data that can include products not directly associated with the HVACR industry.
