COLUMBUS, Ohio — Heating, Air-conditioning, and Refrigeration Distributors International (HARDI) reported a 19.5 percent sales increase from distributor members in December in its monthly TRENDS report. Five of the seven reporting regions reported sales growth of approximately 20 percent, a substantial gain over December 2012, which registered at -1.8 percent.
“The month-to-month performance can be volatile. The strong growth report for December reflects a couple factors,” said Brian Loftus, market research and benchmarking analyst, HARDI. “This year had one extra billing day than the prior year, and we had an extremely cold period that stretched across much of the country this season. December 2012 sales were quite weak across the majority of the country.”
The annualized growth rate is a better measure of overall industry trends. That growth rate has been in the 5-6 percent range for most of 2013.
“The annual sales growth improved to 7.3 percent after the strong December,” said Andrew Duguay, senior economist, HARDI. “A full 80 percent of members reported higher sales in 2013 versus the year prior.”
Inventory levels are understandably modest after the busy December and the Days Sales Outstanding, a measure of how quickly customers pay their bills, indicates a healthy financial profile for contractors, as the DSO is at a lower point for this time of the year than in 2011 or 2012, Loftus said.
Duguay said the cold weather helped in December, but noted construction activity and consumer spending improved during the year, as well.
“January 2014 will have the same number of billing days as January 2013,” Duguay said. “It will be interesting to see if it was cold enough to generate sales comparable to the high-teens growth rate experienced during January 2013.”
Publication date: 3/17/2014