Every year, The ACHR NEWS captures the state of the HVAC industry — where’s it been and where it’s going. Manufacturers reported several notable market trends and their impact on the HVAC industry, and they are optimistic about the opportunities in the year ahead, although they do not expect that 2020 will be without its challenges.
THE PAST YEAR
Nathan Walker, senior vice president of corporate marketing for Goodman Manufacturing, said that during 2019, the company’s performance has increased by the introduction of new HVAC products that factored in a new level of controls technology. In addition to this, he mentioned that offering contractors the opportunity to utilize product support and equipment training was an important part of the company’s strategy.
Mike Branson, president of global air for Rheem Manufacturing, said that 2019 was a strong year for HVAC manufacturing, from the perspective of Rheem and Ruud. The increased use of financing allowed contractors to offer more choices to customers, improving customer satisfaction. In addition, offering manufacturer training to contractors — helping to improve the capabilities of their teams — was a way to form personal relationships with the people who would be offering HVAC solutions to end users.
Manufacturers are confident that 2020 brings a wealth of opportunities to HVAC manufacturing.
Kevin Baxter, vice president of sales for residential HVAC, Trane, said that Trane expects to see continued interest in its high-efficiency products and ductless solutions.
“Customers continue to look for an excellent end-to-end experience, along with high-performance and energy-efficient solutions,” he said. He said that customers interested in smart solutions for their homes represent an opportunity that can be taken advantage of in the year ahead.
“Although we can’t predict all the factors that could potentially impact growth in the industry, from sociopolitical factors and overall economic conditions to consumer confidence or weather, we remain bullish on the residential HVAC market for 2020,” he said.
Similarly, Walker said that the integration of enhanced control technology will benefit the industry.
“Technology insertion continues to be beneficial to both HVAC contractors and homeowners,” he said. “Helping to make installation, operation, and diagnosis easier, innovative technology allows contractors and homeowners to connect with an HVAC system that was not possible in the past. Remote connection technology allows homeowners access to control the HVAC system beyond their home, which has been readily accepted.”
Walker added that technology insertion is a trend that is one of the most beneficial to the contractor and the end user.
Regarding the economy, Branson is confident that the HVAC industry as a whole will continue to see growth throughout the next year. He said that gains in consumer confidence and income are strong indicators that consumers will upgrade or replace their HVAC systems, leading to business for both manufacturers and contractors.
Rheem is preparing for this by doubling down on manufacturing advancements in equipment and connectivity. One example is Rheem’s contractor app, which offers real-time data and support to contractors in the field, improving the speed at which systems issues can be solved.
“[This] is an example of connectivity equipping contractors to solve system issues quickly and efficiently,” he said.
He added that a contractor who leverages the strengths of connectivity can increase customer satisfaction and profit. Smart monitoring systems, he said, allow contractors to serve customers more effectively through offering a new degree of protection, comfort, and energy savings.
Manufacturers are optimistic regarding the HVAC industry; however, this does not mean that the year ahead will be without challenges or obstacles to overcome.
Branson believes that one of the most immediate challenges for the industry is preparing for new refrigerants that will be required with the phasedown of HFCs. Without current federal guidance, states are initiating this transition on their own. Branson said that Rheem supports the passage of the American Innovation and Manufacturing (AIM) Act, which is designed to guide the transition to new refrigerants in the U.S. in a controlled manner.
“A national HFC phasedown, by federal legislation, would create new manufacturing jobs in the U.S., spur further investment in the U.S. economy by the HVACR industry, ensure the continued safety and training of licensed HVACR professionals, and strengthen economic competitiveness,” Branson said.
For Walker, the presence of challenges isn’t a surprise. He said that he couldn’t remember a year that wasn’t challenging in the HVAC industry, and that he remains amazed at the flexibility and resilience that those in the HVAC industry demonstrate, creating growth and success in varying market conditions.
Senior vice president, corporate marketing Goodman Manufacturing
“There will always be new standards, regulations, and other conditions imposed on the HVAC marketplace,” he said. “It’s going to be an exciting time, albeit challenging, to be a leading manufacturer in the HVAC industry. While many consider that the HVAC industry is a mature market without major advancements in technology, if one looks back over the past five to seven years, it becomes obvious that the industry has adopted — and continues to develop — new technology affecting the installation, configuration, operation, and connectivity of the HVAC systems available today.”
Dave Molin, vice president, controls, Trane Commercial HVAC Americas, said that regulations ultimately have a positive effect on the industry as a whole.
“They create clear customer expectations and allow companies to innovate to solve problems for customers in new and exciting ways,” he said. “Our industry needs to engage with regulators to ensure that the best interests of customers and our environment are at the forefront for policy-making.”
In addition to this, cybersecurity is becoming increasingly important, he added. He recommended that all companies work hard to deliver secure and useable software implementations that improve customer experience.
“Ensuring that only authorized people have access to that system is of the utmost importance,” he said. “There are plenty of best practices to follow to protect end users from cyber vulnerabilities. This may mean developing an IT skill set that may not broadly exist in a contracting form, but it is critically important to end users to have highly secure systems.”
He said that the advanced technology of HVAC equipment, while requiring adequate cybersecurity, now brings the potential of customers having equipment that self-corrects and auto-tunes to rapidly changing conditions.
“This is the new reality,” he said. “Emerging artificial intelligence ‘agents’ can learn how to alter system settings to improve energy efficiency, while simultaneously increasing comfort. Equipment will be shipping from manufacturers that leverage a ubiquitous cellular network to provide additional insights as to how that asset is performing, thereby informing future product design considerations for new products. This is an exciting time in our industry.”
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