Industry Numbers Start Growing
August 20, 2007
The Air-Conditioning and Refrigeration Institute (ARI) reported a 3 percent increase in combined central air conditioner and air-source heat pump shipments for the month of June, as compared to the same month last year. Totaling 947,268, the combined factory shipment increase helped offset the 13 percent year-to-date shipment decrease.
Heat-pump shipments were down 0.4 percent from June 2006 shipments, totaling 244,618. Their overall numbers have dropped 12 percent as compared to the same period last year.
So far this year, central air conditioner shipments have totaled 3.6 million, and air source heat pump shipments have totaled 1 million.
Residential and nonresidential construction continues to experience shifts as the economic market ebbs and flows.
According to the Census Bureau, seasonally adjusted housing starts in June increased 2.3 percent from a downwardly revised May total, but were 19 percent below the June 2006 level. Multi-unit houses accounted for the entire monthly gain, rising 5.3 percent in June but falling 15 percent as compared to the same period last year.
Single-unit housing starts fell 0.2 percent in June and 22 percent over the past 12 months.
“Building permits, which are generally a reliable indicator of near term starts, hit a 10-year low, shrinking 7.5 percent from May and 25 percent from June 2006,” reported Ken Simonson, chief economist, Associated General Contractors of America (AGC).
“Multi-unit permits were off 15 percent and 18 percent; single-unit down 4 percent and 27 percent.”
Nonresidential starts, collected by Reed Construction Data, totaled 31.4 billion in June, “a record high level.” The numbers are 39 percent over June of 2006 and 16 percent above the previous peak last November.
The year-to-date total for the first half of 2007 was 20 percent above the total for the first six months of 2006.
Most respondents to an unofficial poll run by Simonson indicated that “residential activity remains very weak, while nonresidential activity is strong and perhaps getting more so.”
Materials pricing is also fluctuating. Some regions of the country are experiencing a spike in copper prices and other metals important to the industry.
The Federal Reserve released its latest “Beige Book,” a summary of informal soundings of businesses conducted by the 12 regional Fed banks.
According to the report, “Most districts said that residential construction and real estate activity continued to decline … seven districts referred to shortages of skilled workers in several industries including construction, manufacturing, and trades … and commercial construction and real estate markets were generally more active than during the previous reporting period.”
Publication date: 08/20/2007