Shipment and Construction Trends Experience Downshift

December 25, 2006
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ARLINGTON, Va. - Unitary shipments continue to experience a shift, as the 13 SEER ramp up has passed and energy price concerns step into the foreground. Heat pump shipments are the new trend to watch. And, although October’s numbers, totaling 122,617 units, are down 35.5 percent from the same month last year, according to the Air-Conditioning and Refrigeration Institute (ARI), heat pump shipment levels are on track to outpace 2005’s totals. The year-to-date total, as of October 2006, is 1,870,314 units, up 4 percent from January-October 2005.


The expected cooling of combined unitary shipments yielded 361,680 units shipped in October, down 49.4 percent from the same month last year. The year-to-date total, 6,339,604, is down 14 percent from January-October 2005. ARI reported a slight shift in the types of units being shipped. The association found that smaller a/c unit shipments have dropped, while larger unit shipments have increased.


October’s construction numbers were also lower as compared to 2005. According to the Dec. 1 report from the Census Bureau, the value of construction put in place in October totaled $1.178 trillion at a seasonally adjusted annual rate. This number was down 1 percent from the downwardly revised September total.


“Construction spending lost momentum in October,” said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). “Nonresidential spending has been flat for the past two months after growing strongly for more than a year, and residential construction spending shrank again in October by 1.9 percent, bringing the cumulative decline to 10 percent since peaking last March.”


New construction starts also fell in October. Tallied by McGraw-Hill Construction, the numbers fell 4 percent at a seasonally adjusted annual rate. The three components - residential and nonresidential building and nonbuilding construction - had similar declines.


“Going forward, I think there is still plenty of life left in hotel, hospital, energy-related, and public spending,” predicted Simonson. “But single-family home construction will remain in free-fall for several months.”


Publication date: 12/25/2006


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