February Distributor Sales Show Mild Improvement but Slowing Growth

Heating, Airconditioning and Refrigeration Distributors International (HARDI) announced North American HVACR average distributor sales for February 2011 up over 7% from same month last year and maintained a string of three consecutive months of at least a 10% annual growth rate.

February’s numbers showed improvement over January’s performance but continue a downward trend in annual growth rates. HARDI’s Monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) Report showed average growth for the month up approximately 2% from last month’s average growth rate. It has now been seven months since annual average growth rates were negative. February’s results were more uneven than forecasted with two U.S. HARDI regions experiencing strong double-digit growth while others showed only moderate growth, and one was down. Canada was flat and continued its fourth month of annual growth rate declines.

Hopefully not a leading indicator, Average Days Sales Outstanding snapped a string of three months of declines increasing almost 7% from last month. Average distributor sales per employee also retreated again for the third consecutive month.

“While of course any growth is good these days, the continued decline in annual growth rates for distributors track with our forecast and reinforces our belief that 2011 growth will be moderate,” said HARDI Executive Vice President and C.O.O. Talbot H. Gee. “As we continue to see commodity and equipment price increases this year, the question will likely be how much of this year’s growth will be inflationary.” Gee continued, “We are continuing to see strong growth in ductless unitary sales, over 80% of which are high-efficiency systems, which should make 2011’s overall unitary sales and efficiency mix look markedly better if it continues.”

The HARDI TRENDS program is an exclusive member benefit comprised of monthly distributor sales reports and quarterly HVACR-specific economic forecasts. TRENDS is produced exclusively for HARDI by the Institute for Trend Research.