Housing Market Slows, Heating Equipment Follows

November 7, 2000
/ Print / Reprints /
/ Text Size+
Honeywell’s Economic Outlook includes an examination of the residential central heating market. After hitting a peak in 1999, heating is expected to ease down a bit.

Residential heating equipment shipments increased to 5.72 million units last year, a 5% increase. This was the third record shipment year in the last four. A strong housing market buoyed the heating industry through the first quarter of 2000. As the pace of housing construction decelerated, heating equipment slowed down as well.

New England and the South Atlantic area had colder winters last season compared to the year before, helping to lift sales, but only slightly. The recent trend, however, has been for warmer-than-normal winters (see Figure 1).

The biggest development has been the move in the Northeast to convert from oil and electricity to natural gas. Skyrocketing prices for heating oil and attractive prices for natural gas have sent oil equipment out of the homeowner’s door.

The slowing in housing starts is expected to depress new installations through 2004. The replacement trend continues to look up and should keep volume from declining by more than 8% from the 99 level.

This year’s shipment total is projected to be down 5%. Shipments should then average about 5.3 million units each year through 2005. This is slightly higher than the 5.26 million average since 1995.

Got Gas?

Gas heating will expand its supremacy and is expected to increase to 61.4% of shipments by 2005 vs. 58.6% last year.

New installations accounted for 35% of heating equipment shipments for the last two years. This is the highest level since 1990. The housing slowdown is expected to reduce this to 29% by 2004.

The replacement market increased 6% in 99, achieving a record 3.72 million units. The forecast is for replacements to drop 4% to 5% this year, then come back to totals following the long-term trend rate (see Figure 2). Replacements will remain at a relatively high level, but will not return to the 99 peak until 2003.

Gas central heating was up 5% to 3.35 million units µ a record µ in 1999. This year, furnace volume is following the reduction in housing starts. However, shipments will still be at historically robust levels. An average of 2.98 million gas furnaces are expected to be shipped annually, along with approximately 190,000 gas boilers per year, through 2005.

Oil-fired central heating equipment gained 7% in 99, from increased separate burner installations. Oil furnaces were down 2%; cast iron and steel boiler shipments were essentially the same as 98. Oil heating equipment shipments are predicted to decrease at a compound annual rate of 2.9% through 2005.

Electric central heating shipments were up 4% a year ago due to increased housing construction in the South and West. Electric heating equipment can be expected to drop by 4% in 2000. Heat pumps will most likely average 1.17 million annual units shipped through 2005, slightly below the 1.2 million average seen since 1996.

Publication date: 11/13/2000

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

Recent Articles by Greg Mazurkiewicz

You must login or register in order to post a comment.



Image Galleries

2014 Energy Efficiency Forum

Highlights from the 25th annual Energy Efficiency Forum in Washington, D.C.


NEWSMakers: Jeremy Begley

Jeremy Begley, home-performance specialist and Web and social media manager with National Heating and Air Conditioning Co. in Cincinnati discusses how and why you should add home-performance philosophies to your contracting repertoire. Posted on Sept. 12.

More Podcasts


NEWS 09-15-14 cover

2014 September 15

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

Venting R-22

The NEWS reported that a man received prison time for venting R-22. Should EPA step up enforcement?
View Results Poll Archive


2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research


Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


Magazine image
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.


facebook icontwitter iconyoutube iconLinkedIn i con