Heating, Air-conditioning & Refrigeration Distributors International (HARDI) released its monthly TRENDS report, showing the average sales performance by HARDI distributors was an increase of 17.9% during June 2022.

The average annual sales growth for the 12 months through June 2022 is 23.6%.

"It looks like the annual sales growth has peaked,” said HARDI Market Research & Benchmarking Analyst Brian Loftus. “The annual sales growth was near 25% during the first quarter, then in the 23.5% area the second quarter.  The annual sales growth rate has peaked in five of our seven economic regions, and the industry PPI peaked in April.”

The Days Sales Outstanding, a measure of how quickly customers pay their bills, was 39 days at the end of June 2022.  “The June 2022 DSO is comparable to June 2021. This rate is considerably better than the pre-pandemic June level in the 43-day area,” Loftus added.  

The TRENDS growth rate is a lot like the other economic data we have seen lately. The results have been very strong but appear to be running out of steam. Average monthly job growth was 450K during the first six months of the year but 375K during the second quarter. Monthly job gains in the 400K area is unsustainable, especially since the average monthly growth during the Great Expansion was 200K and the unemployment rate is down to 3.6%.

“Growth for our economy and TRENDS has been exceptional but will be slowing during the year ahead.  Interest rates are considerably higher than at the beginning of the year and Consumer Sentiment is considerably lower,” Loftus said. “Economic cycles are not extinct and this one is rolling over into the next phase.”