This is a part of the 2014 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.

2014 Distribution Trends Report

Construction driving HVACR growth. With much of HVACR’s demand being contingent on construction, the sector is watching closely to see how the commercial and residential construction markets move this year. So far, distributor sales are up, and turning a profit in the first quarter is quite a statement, says Talbot Gee, executive vice president and COO of Heating, Air-conditioning & Refrigeration Distributors International (HARDI), Columbus, OH. 2013 was one of the first years since 2006 where the replacement rate for HVACR equipment increased. “We see a lot of reason to believe that 2015 to 2017 should be rather strong economic years,” Gee says.

Regulatory issues could have positive and negative effects.  Beginning Jan. 1, 2015, distributors will have to follow a new DOE regulation raising minimum standards for cooling equipment and heat pumps. The change will mainly affect replacement rates in southern states. It’s unclear how the market will react to the change, but distributors have a guaranteed sell-through period that should help avoid stranded inventory. David Sosna, general manager, Comfort Supply, Nashville, TN, says his company will be offering education on the new efficiency standards to help contractors handle the upcoming changes. Another policy discussion is taking place and, if put into law, would allow a small business owner to expense the costs of new HVACR equipment.

HVACR careers short on skilled hires, but accredited degree programs could change that. The top 25 educational programs training HVAC technicians was released by hvacclasses.org in June, citing three characteristics of the programs as being especially important for trainees. Each of the programs is accredited; each offers a full-fledged degree and each offers special certifications for local regulations or EPA certification under the Clean Air Act. But it’s still hard to find good people, says David Sosna, general manager, Comfort Supply, Nashville, TN. “We are trying to develop a management training program to try and get kids right out of college that have an interest in our industry and try to start grooming those people from within,” Sosna says. “It is hard to recruit from outside the company, to fill key positions.”