Emerson Climate Technologies: Five Hot Trends We're Watching in the Cooling Industry

For people who do forecasting and monitor industry trends, the past few years have been very interesting. Housing starts plunged, the U.S. economy became uncertain, the industry went through R-22 to R-410A refrigerant transition in 2010, and then the United States experienced its hottest summer in 20 years, with more than 270 seasonal cooling degree days. What a long and interesting trip it has been.

Obviously, the task of identifying trends in this environment is challenging. Fortunately, Emerson Climate Technologies has a unique perspective on the HVACR industry. Emerson executives are working daily with major OEMs, talking to contractors and meeting with end-users in many industries to understand their challenges and needs. The depth and breadth of the Emerson offerings across all industry segments and applications gives that organization a good foundation of sales history to pull from in making predictions for the year.

In identifying this year's trends for the cooling industry, Emerson looks at a number of factors affecting the residential and commercial air-conditioning markets to develop unique forecasting models. These factors include data from housing starts, residential fixed investment, commercial markets research, gross domestic product data, consumer spending, producer price index, prime interest rate, consumer confidence, unemployment rate and, for short-term planning, weather forecasts. The use of these models not only ensures adequate supply of the right types and quantities of products, it also informs customers of expected shifts in product demand.

For 2011, Emerson is planning for continued economic uncertainty coupled with a slow and choppy recovery. Some improvements in housing starts and pent-up demand should provide single-digit growth in the unitary air-conditioning market, assuming the nation experiences normal weather. Based on various econometric models, the current forecast suggests five “megatrends” that will play a major role for the industry, both in 2011 and into the future.