According to the October Air-Conditioning, Heating, & Refrigeration Institute (AHRI) numbers, gas furnace shipments were up 7 percent over the same time period in 2016. In addition, air conditioner shipments were up nearly 6 percent, and heat pumps up almost 8 percent.
Unfortunately, the good times might be coming to an end. At least that was the view of Alan Beaulieu, chief economist, Heating, Air-conditioning & Refrigeration Distributors International (HARDI), when he spoke at the HARDI conference in early December.
“We’ve identified a peak in industrial production in the first quarter of 2018,” he said. “This economic rise will begin to slow in the back half of 2018 and will continue in that direction in 2019. At that point, there will technically be a recession, but it won’t be anything like the recession of 2008. It will simply be an off year.”
Beaulieu said 2019 is a great year to expand your company via acquisitions.
“Find a vertical or horizontal company that looks tired,” he said. “Play up the recession that’s occurred in 2018, and pounce on their business. I know that doesn’t seem right to say or do that, but it’s legal; it’s called a target acquisition. Act on these things now, because if you build your business properly today, life is really going to be fun in the 2020s.”
While contractors can’t control the economy, when looking toward 2018 and beyond, they can certainly plan for trends that are now, or will soon be, affecting the HVACR industry. Here are just a few:
Online selling — More and more homeowners are buying products online and calling on contractors to do an install only. Do you have a policy and/or plan in place? This is not going to slow down any time soon as online sales are growing in virtually every area of the U.S. economy. As a manufacturer recently told me, “The HVACR industry is not going to be the unicorn in regards to online selling. Our industry is going in that direction just like everyone else.”
Tax bill — HVACR contractors should be paying close attention to how comprehensive tax reform will affect them. This is especially true of the HVACR industry as items like geothermal tax credits, repeal of the death tax, and the expensing of qualified HVACR equipment by commercial building owners are close to the goal line. Each of these items could greatly affect your business. Now is the time to contact your representatives to make sure your voice is heard. Of course, this has such momentum it might be set in stone by the time you read this.
Smart homes — Everything is becoming connected, and the HVACR industry is no different. Your customers want a convenient, smart home even if they don’t know what IoT (Internet of Things) stands for. It is your job to introduce it to them. This means having all your technicians and sales folks familiar with the products. Studies show 26 billion devices will be connected to the IoT by 2020. Make sure your company gets its piece of the pie.
Online reviews — Your marketing efforts might get people to recognize your company and check out your website. However, you can be sure that most homeowners will check out your online reviews before they decide to invite you into their home. In addition to doing a great job on every call, you need to have your employees be proactive in asking for online reviews. It is a transparent world the HVACR industry now functions in. Make sure you are putting your best foot forward.