What is on the horizon for HVAC equipment sales and manufacturing? Supply House Times asked two knowledgeable members of the industry, our own HVAC columnist, Jim Wheeler, and Monte Salsman, chief operating officer for WinWholesale, to provide some insight.
“The biggest trend in HVAC right now is converting customers to equipment using the new (environmentally friendly) R-410A refrigerant,” Wheeler acknowledged. “Since the manufacturers must stop using (the HCFC) R-22 in their new equipment starting in 2010, and we expect severe shortages for servicing purposes by 2015, we are finally seeing an important rise in R-410A equipment manufacture and sales,” he said.
Salsman drew attention to another environmentally focused influence on the HVAC market. “We’re seeing a growing requirement to ‘build green.’ As systems need to operate more efficiently, inventory and installation are affected. We’re adapting our inventory and knowledge to meet these changing demands,” he said.
“As an example, there’s been an increase in the installation of hybrid systems,” Salsman continued. “Therefore, we need to be able to provide the right products and expertise to help our customers serve their customers.”
Another issue affecting the industry, Salsman said, is indoor air quality. “[This] is also a growing trend. Mold litigation is certainly bringing this issue to the forefront,” he noted.
We asked our two experts where they saw the market heading in 2008. “With a drop in the Federal Reserve interest rate, we expect a drop in mortgage rates,” Wheeler said, “which we hope will bring a return to a hot housing market - which will positively impact new construction and boost HVAC sales in 2008.”
Salsman, on the other hand, presented a less encouraging view. “Our feeling is that the HVAC market will most likely remain flat in 2008 due to the housing market and the low rate of new construction,” he predicted.
But on a more positive note, Salsman added, “We’ll continue to deal with issues like the migration from R-22 to R-410A, and the strong focus on remodeling, retrofitting and replacing older units with higher efficiency equipment. This creates some interesting challenges, such as size and sound issues, so we expect to see some innovative solutions to this problem in the coming year.”
When asked what hurdles the HVAC manufacturers and distributors have to face in the current market, Wheeler focused on the manufacturers’ viewpoint and Salsman took a more introspective look at distributors.
According to Wheeler, “The biggest problem facing HVAC manufacturers right now is a sluggish new-construction market and rising steel, copper and aluminum prices.”
Salsman noted that distributors, too, had to face these impediments and others. “Clearly managing our business through a downturn is a key priority,” he noted. “I’m proud of the way our local operators are focusing on their customers’ needs, adapting to market conditions and really weathering this storm well.
“Another primary challenge we face is the ability to recruit good people to help us build upon our growth,” Salsman added. “WinWholesale offers a unique opportunity, and to continue our success, we need to make sure we effectively communicate the benefits of that opportunity for the next generation of wholesalers.”
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