The Industry Continues Its Upward Climb

January 31, 2005
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According to statistics released by both the Air-Conditioning and Refrigeration Institute (ARI) and the Gas Appliance Manufacturers Association (GAMA), the industry as a whole has been on the economic upswing during the past few years, and the year-end figures for 2004 have inspired a lot of optimism as 2005 gets under way.

According to ARI records, shipments of 7,401,067 air-source heat pumps and unitary air conditioners eclipsed the previous record of 6,897,262 units set in 2003 by 9 percent. Heat pump shipments surged ahead of 2003's total by 16 percent as a record 1,886,100 units were shipped in 2004.

"For the third straight year, manufacturer shipments of residential central air conditioners and air-source heat pumps set a record in 2004," said William Sutton, president of ARI. "The final shipments for 2004 broke the 7 million unit mark for the first time. This is proof that the economy is improving, buoyed by continued growth in housing coupled with a strong replacement market."

While interest rates are expected to rise moderately this year, Sutton maintains that a growing economy and the transition to the 13 SEER minimum efficiency level by Jan. 23, 2006, "should propel the industry to another record in 2005."

"In addition, after several years of lackluster performance, the commercial air conditioning and refrigeration market improved in 2004," he said. "The outlook for 2005 is brighter now than in past years, thanks to better prospects for the economy and the projected improvement in commercial construction and retrofits."

Furnace Sales Heat Up

On the heating side of things, Evan Gaddis, president of GAMA, remains positive about 2005. Gas warm air furnace shipments for 2004 of 3,519,024 units surpassed the total for 2003, which was 3,265,550. It is an increase of about 7 percent.

There was also an increase for oil warm-air furnaces. There were 126,741 units shipped in 2003, which went up 2.3 percent to 129,715 units shipped in 2004.

In the cast iron boilers category, both commercial and residential, 2004 was a very good year. The number of gas-fired steam boilers shipped in 2003 was 41,534, and the total of water boilers was 193,692.

The numbers for 2004 dropped slightly for gas-fired steam boilers (40,232), while the 196,732 units of water boilers shipped marks a slight increase.

In the oil-fired boilers category in 2003, 20,263 oil-fired steam boilers and 127,910 oil-fired water boilers were shipped. In 2004, those numbers jumped to 22,039 for oil-fired steam boilers (an 8.8 percent increase) and 140,429 for oil-fired water boilers (a 9.8 percent increase).

"If you look at the market, sales came to light in the second half of 2004," said Gaddis. "I think that's a good indication we're looking to be strong in 2005. Now the commercial side of things is starting to take off. It's pretty positive across the board."

Statistical Profile

ARI's "Statistical Profile," released Oct. 7, 2004, paints an impressive picture in regards to this industry's people, finances, equipment, and distribution.

It is a comprehensive profile designed "to provide a convenient source of data on the scope, size, and growth of the industry." (Nonmembers can order a copy of the publication by visiting ARI's bookstore at www.ari.org/bookstore.)

Without spilling all of the beans, here are a few highlights from the report:

  • The latest available figures, which vary by year depending upon how the data is maintained, show approximately 123,300 people employed in the air conditioning and heating manufacturing field, including 92,600 in production. They earn about $4.5 billion per year at locations throughout the United States, "making them an important economic factor in many communities as well as to the nation itself."

  • The value of shipments re-ported in the 2002 Census of Manufacturers, the latest year available, is slightly more than $30 billion, up 65 percent from 1992.

  • The value of heat transfer equipment reported in the Current Industrial Report was $6.4 billion, exceeding unitary equipment with its value of $5.4 billion.

  • The market for unitary equipment has been influenced by trends in new construction and weather patterns. In recent years, this market has been bolstered by a growing number of replacement and retrofit sales. Many estimate the latter segment to be more than 60 percent of total sales.

  • In 2003, of the 105,842,000 occupied housing units in the United States, 58.3 percent had central air conditioning, 24.9 percent had room air conditioners only, and 16.6 percent had no air conditioning. In the South, 80.4 percent (30,665,000) of occupied housing units had central air conditioning, 16.7 percent had room air conditioning only, and 2.9 percent had no air conditioning.

  • In 2003, 87 percent (1,155,000) of new single-family houses completed in the United States included central air conditioning. In the South, this figure reached 99 percent (611,000). Heat pumps were installed in 42 percent (260,000) of the 614,000 new single-family houses completed in the South, and 23 percent (309,000) of the 1,325,000 completed nationwide.

    Online survey: What does 2005 hold in store for your business? Take the online a survey on www.achrnews.com and let us know your prediction for 2005. What is your forecast for your HVACR company in 2005? Will this year be a better year than last year? Look for the survey results in a future issue of The News.

    Publication date: 02/07/2005

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