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Feast And Famine Hitting Home

December 12, 2005
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We're closing in on what is going to be another record year for industry A/C and heat pump shipments. Why is business so good nationally? William "Woody" Sutton, ARI president, said that one of the reasons is new home construction. Even with a couple of lackluster months this year, it's still strong. (See "Unitary Shipments Up 73 Percent" in this issue for the full story.)

In his estimation, another reason might be the aftermath of Hurricanes Katrina and Rita. The rebuilding may have bumped the industry at a time when it would typically be ratcheting down in preparation for seasonal cooling/heating inventory changeover. Especially this year, as manufacturers are juggling the 13 SEER transition.

Still, another reason may be the 13 SEER transition itself.

As is often the case in the middle of a hotter-than-hell August, contractors can find themselves without inventory to finish off the last few weeks of the summer.

Why? Two reasons: Manufacturers often take their cue from the Fourth of July. If the summer heat hasn't mounted by then, production schedules can get shaved. Or, if it's just been a long scorching summer, it's hard to keep up with demand, no matter how sophisticated the planning.

What's that got to do with this year and 13 SEER? The last 30 days have seen inventory shortages of unitary product in particular markets. A contractor from Arkansas wrote us recently declaring he had to drive to Tennessee to purchase a particular brand of air conditioner. Another in Florida was lamenting the fact that 10-SEER product was nowhere to be found. A third in New England couldn't find ...

Why would contractors be complaining about not finding air conditioning units in November and December? It appears that the demand for anything less than a 13-SEER unit has been pretty strong in some areas. One distributor was reportedly substituting 15-SEER units for 10-SEER orders, just so as not to lose a good customer. There are others with similar stories.

Most distributors and manufacturers don't care much for such lopsided product substitutions, but this is a different kind of year. Another story of shortages has been that contractors are currently purchasing a larger number of 13-SEER units, betting on the possibility that some manufacturers won't be able to crank out enough of the new baseline efficiency units to keep up with demand at a future date - a self-fulfilling prophecy, perhaps?

The Seasons, They Are Changing

The changeover to a minimum efficiency standard of 13 SEER has brought quite a bit of uniqueness to our fundamental business. Contractors are buying summer items in the winter, buying pickup trucks with wider beds to accommodate larger A/C units, and training their salespeople how to sell something in addition to efficiency. Some distributors are adding as much as 15 percent warehouse space to accommodate larger units, and holding training seminars about topics such as indoor air quality to supplant potentially eroding profit margins of high efficiency air conditioning products.

Manufacturers are investing in new technologies like never before: Several manufacturers are making moves in 2006 to compete in the tier one product category; nearly all unitary manufacturers have made substantial capital investments in assembly line operations and may still have a few surprises up their sleeves, and nearly as many have launched amazing training programs and product introduction programs.

The one thing all three groups have in common: Industry training is on the upswing.

Ever heard of a Webinar much before this year?

It's an online presentation that you can listen to and view from the comfort of your own computer screen.

They have come into vogue in many industries during the last three years. The HVAC industry is into the act now, with the Air Conditioning Contractors of America (ACCA), the Heating, Airconditioning & Refrigeration Distributors International (HARDI), and The NEWS having recently co-sponsored a series of Webinars about - what else? - 13 SEER.

Yes, things are changing; from the way that contractors seek training for technologies to the technologies themselves.

Mike Murphy is editor-in-chief. He can be reached at 248-244-6446, 248-244-2905 (fax), or mikemurphy@achrnews.com.

Publication date: 12/12/2005

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