“December was not the most difficult monthly comparison of the year, but it was the weakest sales decline,” said Brian Loftus, HARDI’s macroeconomic and residential market analyst. “The results this month were challenged by one less billing day, and heating degree days were off by 20% year-to-year and 20% below normal.”

The Days Sales Outstanding, a measure of how quickly customers pay their bills, was near 43 days during December. “The DSO has a normal seasonality, so we need to compare corresponding months to know what the latest number is saying,” said Loftus. “DSO for December has slipped from 44.5 days during December 2020 to 43.5 during December 2021 and December 2022. The December 2023 DSO is down to 43. The performance is impressive after the rapid increase in rates and market downshifting.

“This sales growth rate trend looks very discouraging, but that is not what I took from the report,” said Loftus. “From an operating perspective, the sales-to-inventory ratio is improving, and the sales comps are easy during the next six months. Going forward, the pace of existing home sales is turning and mortgage rates are shrinking. This annual growth rate chart will be turning higher very soon.”

HARDI members do not receive financial compensation in exchange for their monthly sales data and can discontinue their participation without prior notice or penalty. Participation is voluntary, and the depth of market coverage varies from region to region. An independent entity collects and compiles the data, which can include sales information about products not directly associated with the HVACR industry.