Summer Brings Hot Temperatures, Sales for HVAC Distributors

 

A late summer surge helped distributors have a sizzling busy season

The busy summer season has seen its fair share of ups and downs so far, but overall, HVACR distribution is in a good place.

According to Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), average monthly sales for HARDI distributor members increased 15.9 percent in June 2016, and the average annualized growth from June 2015 to June 2016 was 7.2 percent. This annual growth rate has generally remained within the 6-7 percent range for most of the past two years.

Nationwide, this summer has been one of the hottest in recorded history. Per the National Oceanic and Atmospheric Administration (NOAA), the June temperature for the contiguous U.S. was 71.8°F, or 3.3° above the 20th century average. This was the warmest June on record and surpassed the previous record of 71.6° set in 1933.

The NOAA also noted that 17 states across the West, Great Plains, and parts of the Southeast had June temperatures that were much above average.

Tom Perić, editor of Distribution Center magazine, believes the outlook for the rest of the summer, and into 2017, is bright.

“Generally speaking, the economy looks positive for distributors and the industry, in general,” he said. “Gross domestic product is up, and we are going to see a better 2017 than 2016, according to one noted HVACR industry economist.”

Larry Trimbach, owner of 2-J Supply Co. in Dayton, Ohio, and HARDI’s regional director for the Great Lakes economic region, noted it has been a particularly topsy-turvy season in the Great Lakes region, but things have really picked up recently.

“Sales in May were down here in the Great Lakes region, but June flew up the charts,” he said. The staff at 2-J Supply and the region as a whole experienced a good July. It’s not quite as robust as June, but business was good.

“We are expecting 2016 to be a strong year and believe 2017 will be good, as well,” he continued. “We added a new location in Toledo, and we are kind of bullish on the economy right now. We also don’t feel like the election will put a damper on things too much, no matter the result.”

The results are consistent with other consumer, residential, and nonresidential building reports,” said Connor Lokar, senior economist, HARDI. “Existing and new home sales are doing well through the mid-point of the year. Housing starts overall are growing at a near-double digit pace, with single-family outperforming multifamily.”

REPAIRS AND TRENDS

Trimbach said customers are considering repairs and replacements, noting there is currently a good mix of both going on in the industry.

“As a distributor, we probably attract more repair-driven contractors,” he said. “Some of our competitors didn’t embrace repairs like we did, and it allows us to end up selling to people who aren’t regulars of ours in these times. To repair equipment doesn’t just include the cost of a coil and a condenser or whatever. It depends on how and where it is installed. It’s an important decision.”

According to Perić, a majority of distributors he has spoken with have said consumers are watching their dollars closely and leaning toward repairing systems.

In one such conversation, one distributor noted: “Dry-ship R-22 units are a very hot commodity. What does this mean? It implies that people are not installing new R-410a systems. This is probably why some OEMs are launching R-407c-rated condensing units, which allows them to replace R-22 condensing units and recharge the system with R-22. We are still repairing systems rather than replacing them.”

Perić also noted that replacement compressors are spiking upward, as well.

“As regulations continue to impact manufacturers, prices will continue to rise, which places a brake on replacement units for consumers,” he said.

Ductless technologies have certainly caught the interest of HVACR distributors.

“Mini splits have become a significant part of our business, and the same is true for our peers,” said Trimbach. “The trend has been to work toward higher SEER ratings. People have more knowledge now, and contractors are savvier in their sales approaches. Everyone is more knowledgeable overall.”

GOING DIGITAL

Contractors, distributors, manufacturers, customers, and everyone else associated with HVAC is becoming more technologically advanced and accepting that mobile devices are now a necessary part of doing business. Without a doubt, mobile applications are impacting every level of the HVAC supply chain, including the relationship between contractors and distributors.

“Mobile apps are certainly a differentiator right now,” said Brian Loftus, market research and benchmarking analyst, HARDI. “There is a lot of talk and concern about that.”

Perić believes it is just too early to tell what effect mobile applications are having, as there doesn’t seem to be enough data to make a factual assessment.

“What is true, however, is that distributors are aware that mobile access and the utility it provides is growing as contractors join the mainstream with their devices,” he said. “For example, more distributors have begun to make their websites mobile friendly. If they haven’t taken that step yet, they’re behind the curve.”

Trimbach said mobile applications can certainly make things less personal, but it’s imperative to stay ahead of what is happening in the industry.

“These apps help strengthen a distributor’s relationship with its contractors,” he said. “They also help a company get ahead of the trends, which reiterates that you’re doing what’s necessary to be successful.”

Continue reading Summer Brings Hot Temperatures, Sales for HVAC Distributors

Regular Maintenance Critical for VRF Systems

HVAC contractors share tips for servicing variable refrigerant flow systems

ULTRA IMPORTANT
ULTRA IMPORTANT: “Like any mechanical system, semiannual maintenance is very important to maintain the life cycle of any system,” said Matthew Kuntz, vice president of Jupiter-Tequesta Air Conditioning, Plumbing & Electric Inc. in Tequesta, Florida.

As the American market becomes more familiar with variable refrigerant flow (VRF) systems, it’s discovering firsthand the technology’s ability to deliver exceptional comfort with lower life cycle costs.

Additionally, contractors are touting the ability to perform maintenance on systems individually, allowing them to fix a problem without disrupting the comfort delivered to the remainder of the facility.

According to a study by the Pacific Northwest National Laboratory for the General Services Administration (GSA), regular maintenance on VRF systems consists of changing filters and cleaning coils for the fan coil units. Additionally, maintenance of the compressor unit is minimal, allowing significant maintenance savings for that part of the system compared to chilled water and hot water plant equipment.

“VRF systems don’t require service like competing technologies,” said Matthew Kuntz, vice president of Jupiter-Tequesta Air Conditioning, Plumbing & Electric Inc. in Tequesta, Florida. “The time needed to perform maintenance on a VRF system versus the other options is far less from a labor and materials standpoint. If you’re only maintaining one or two condensing units versus one per traditional air handler, you can see how the time savings adds up fast.”

However, regular maintenance is still important, Kuntz noted. “Like any mechanical system, semiannual maintenance is very important to maintain the life cycle of any system. The main reasons systems fail is from lack of maintenance. So maintenance is ultra-important.”

Dominic Freschi, owner of Freschi Service Experts in Antioch, California, said periodic maintenance is necessary on all HVAC systems.

“It’s no more or less so with VRF systems,” he explained. “Maintenance helps ensure the longevity, efficiency, and reliability of the system.”

Rick Boucher, technical advisor at Comfort Supply Inc. in Pittsburgh, said regular maintenance is actually critical for VRF systems.

“Some people tend to neglect regular maintenance because VRF systems tend to be very reliable,” Boucher said. “System performance and energy efficiency are the first to go without regular maintenance. This affects the customers’ bottom lines and their perception of the product and the contractor.”

COMMON PROBLEMS

According to Freschi, a common problem he observes with VRF systems stems from installation errors.

“The most common issue we see is contractors not following standard industry practices during the installation process. It’s important for consumers to hire reputable contractors. There are no specific common failure points of VRF equipment. They are as reliable as any HVAC system, provided the equipment is installed and maintained properly.”

Kuntz agreed, saying he runs into very few problems with VRF systems.

“Power surges cause the most issues,” he explained. “Probably the most common cause of failure on a VRF system occurs on the circuit boards.”

Boucher said a lack of filter maintenance is “probably the single most common maintenance-related problem on VRF systems.”

“The total static pressure on these systems is typically less than that of a traditional system,” Boucher continued. “This leads to greater performance issues and loss of energy efficiency. Refrigerant leaks in the system are probably a close second. Mechanical failures are also common causes of failure. All of these issues are absolutely preventable when caught early on through regular maintenance. It starts with proper installation techniques. With regular maintenance, refrigerant leaks can be identified and repairs can be made before system efficiency is affected greatly. Our most successful contractors make use of our tools, like the Mitsubishi Maintenance Tool, for logging and checking system performance. This helps identify issues before they become critical.”

BEST PRACTICES

So, what are some best practices when it comes to VRF maintenance?

Freschi noted it is imperative for contractors to follow manufacturers’ installation guidelines. “They also need to pressure-test and evacuate the refrigerant system to ensure the field-installed piping is sound,” he added.

Kuntz said his technicians follow a list of best practices that includes making sure all parts of the system are free from dust and buildup. “We also make sure they are bonded for electrical surges to prevent issues during storms.”

“The most successful contractors we work with offer regular maintenance to their customers from day one,” Boucher added. “Communicating the benefits to the customer is a skill that can and should be taught to all contractors.”