Sales Boost Encourages Industry

November 26, 2007
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New statistics released by the Air-Conditioning and Refrigeration Institute (ARI) report an increase in shipment numbers. According to ARI, September’s combined U.S. factory shipments of central air conditioners and air-source heat pumps totaled 527,516, up 4.7 percent as compared to September of 2006. Year-to-date, the combined shipments totaled 5.3 million, dropping 10.8 percent as compared to the same time last year.

After the substantial drops in combined shipment numbers through the first quarter, the second quarter showed marked improvement as the number of units shipped rose. The third quarter experienced some bumps when July totals dropped slightly and August totals slipped 19 percent to 571,420. September’s increase, however, ended the third quarter on a positive.

Air-source heat pump shipments have been down for the year. In August, the totals dropped 23 percent as compared to 2006. September’s total of 156,617 was down 3.4 percent as compared to September of 2006. Year-to-date, heat pump shipments totaled 1,544,260, down 11.6 percent from the same period last year.

Construction starts and the producer price index (PPI) also experienced some fluctuations in September. According to the McGraw-Hill Construction (MHC) report, new construction starts fell 9 percent in September and 11 percent year-to-date.

Nonbuilding construction, though dropping 27 percent in September, increased 6 percent year-to-date. The nonresidential building picture was much the same. Although it dropped 6 percent in September, the year-to-date total increased 3 percent. The residential building numbers grew 1 percent in September, further supported by a 29 percent increase in multifamily housing. Year-to-date, however, the numbers dropped 24 percent.

Ken Simonson, chief economist for the Associated General Contractors of America (AGC), predicted growth in specific nonresidential construction sectors.

“In the year ahead, I expect some pullback in office, retail, and hotel construction, but more growth in energy, power, and hospital work,” he said. “And, accelerating costs of labor and materials will again be tough for contractors, private owners, and public agencies doing construction.”

According to the AGC, September’s building costs were held down by a 3.9 percent drop in the PPI for copper mill shapes, a 2.2 percent drop in aluminum mill shapes, and a 1.2 percent drop in steel mill products. Simonson cautioned that higher costs appear to be ahead for many construction PPIs, especially copper. “Copper futures are rising and are more than 10 percent higher than a year ago.”

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Publication date: 11/26/2007

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