"Achieving a new record in 2003 of 6,807,262 shipments for central air conditioners and heat pumps was quite a feat given the slowdown in economic activity during the war in Iraq and the struggling U.S. recovery," said William G. Sutton, ARI president.

Sutton believes that the latest housing boom and the surge in home refinancing resulting from low mortgage rates helped to spur shipments for new and remodeled homes. He explained that replacements remained strong nationwide and were especially aided by hot weather in the West and Southwest.

Sutton also has some future predictions for A/C shipments.

"With expectations high for only very modest increases in mortgage rates, the new housing market should remain strong in 2004," he said. "The pace of refinanced mortgages is expected to decline, so some observers believe the incentive for remodeling of homes will soften. But replacements, because of the 60 to 70 million units in service, will remain high, and that will be helpful to overall shipments in 2004, which could match or exceed shipments last year."

While replacement service may still be strong in 2004, one concern for manufacturers this year is the lack of job creation, which could cause customers to think twice before purchasing a new A/C system.

"A pickup to a monthly gain of 150,000 jobs would help consumers feel more confident about a big ticket purchase of a replacement unit or a new home," said Sutton. "More jobs will also help lower vacancy rates in existing buildings and provide more incentive for new office and plant construction and more shipments of large unitary equipment and chillers."

The recent ARI statistics also reveal that combined shipments of 363,647 central air conditioners and air-source heat pumps for December were down 3 percent compared to shipments from the same month last year.

Factory stocks for December 2003 were down 24,058 units from November 2003, and up 43,321 units from December 2002. December 2003 distributor inventories were down 5,385 units from November 2003, and down 44,096 units from December 2002.

December 2003 distributor shipments were down 1 percent from December 2002, with year-to-date shipments even with last year.

Publication date: 02/23/2004