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2005: One For The Record Books

January 16, 2006
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With 8 million units in the bag, and one more month's sales yet to be reported, one would think this newsmagazine could get its stories straight about what happened with shipments in 2005. One week The NEWS tells you to watch out for product shortages, the next week it tells you that record shipments are underway. Consider some lead story themes from these recent issues and a few prognostications* for future issues of The NEWS:

Dec. 12, 2005:
Unitary Sales Up 78 Percent In October

Dec. 19, 2005:
Contractors Still Concerned About 13 Seer Availability

Jan. 16, 2006:
Unitary Sales 15 Percent Ahead of 2005, November Y.T.D.

Jan. 23, 2006*:
Possible Shortages Continuing

Feb 13, 2006*:
Shipments Top 8.1 Million Units In 2005

What, shortages and increased sales? Yes, it's true. The year 2005 was so topsy-turvy that you'll soon discover the strangest dichotomy most of us have seen in very many years. Spot shortages of air conditioners and heat pumps are being reported, primarily in the Southeastern United States. Yet, at the same time, HVAC industry manufacturers have been cranking out record numbers of boxes, thereby enabling the industry to have the best year on record.

WATER EVERYWHERE, BUT NOT A DROP TO DRINK?

If manufacturers are doing such a great job of building more boxes than ever before, why can't some contractors find certain pieces of equipment when they need it? After all, who cares if air conditioners and heat pumps are being turned out in record numbers if you can't get your hands on the particular unit that your customer needs right now.

It's the common law of business - supply and demand. Consider the following example. During the holiday shopping season, one of the hottest electronics items moving out the doors of every shopping mall was the iPod by Apple Computer Inc. The company makes several versions of the MP3 music players.

A couple of days before Christmas I found out that the iPod miniâ„¢ would be replaced by the iPod nanoâ„¢. The next problem I encountered while searching stores in and around Strongsville, Ohio, was that the iPod nano wasn't any easier to find than the soon-to-be obsolete iPod mini.

I couldn't bring myself to purchase the bigger, more expensive iPod that holds 30GB worth of music, which every store had in stock. My daughter's homework would certainly have gone by the wayside as she secretively searched for 7,500 songs with which to fill the little gadget.

A few days later, after the hectic Christmas rush (otherwise known as the calm before the storm), and during the shark-infested frenzy (otherwise known as after-Christmas shopping days), I found an iPod nano in Troy, Mich.

Supply and demand had worked its magic, as it always does.

Think of it this way: In the HVAC world, 10, 11, and 12 SEER products are the mini iPods; the new 13 SEER products are the nanos. The HVAC manufacturers built as much mini product as they could, while trying not to have too many left over when the time came to dump the product line in favor of a new version. At some point the shortage hits, and people are forced to go shopping for the nanos. However, the nanos aren't in tremendous supply because the manufacturers haven't had time to build very many of them, yet.

Still, if this was the music industry, a lot of people wanted to hear some tunes last year, and they were buying everything that was available. Factories were working around the clock (and still are), building the largest number of mini and nano products in the history of the industry.

All things considered, manufacturers, distributors, and contractors should be patting themselves on the back. What a year!

The song we're listening to isn't quite played out, yet. But, to jump from iPod technology back to LPs and 45s on the record machine, and to steal an old line from Dick Clark's American Bandstand: ‘It's got a good beat, and I could dance to it. I'd give it about a 95.'

Mike Murphy, Editor-In-Chief: 248-244-6446; 248-244-2905 (fax); mikemurphy@achrnews.com

Publication date: 01/16/2006

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