COLUMBUS, Ohio — The monthly TRENDS report from Heating, Air-Conditioning & Refrigeration Distributors International (HARDI) showed that sales by participating member distributors increased by 5.2% in July. The annual sales growth for the 12 months through July 2023 was 6.2%.

“Unusually warm temps were in the headlines during the past month, but July 2022 was very warm also,” said Brian Loftus, HARDI's macroeconomic and residential market analyst. “July 2023 had 4% more cooling degree days than normal, but that was off by 4% from July 2022. Under those conditions, the 5% sales gain with only a modest price benefit, and after the 6% decline in June, looks like a solid report and helped preserve the six-handle on the annual rate for one more month.”

The Days Sales Outstanding (DSO), a measure of how quickly customers pay their bills, remained at 39 days during July, as it was in June. “The normal DSO for this time of year pre-COVID was in the mid-40s,” said Loftus. “I was expecting the DSO to revert to the pre-COVID levels by now. Either this is the new normal for summer or the economy is steady and the financial fitness of customers remains solid. It could be both.

Loftus said that the annual pace of existing home sales, a leading indicator of home HVAC equipment replacement demand, dropped from 4.6 million in the spring to 4.3 million. The current demand is off by about 20% from the normal 5.2 million pre-COVID pace, he said. “Replacement demand is likely to remain subdued after home mortgage rates pushed through 7.5% while more than 60% of home mortgages are 4% or less,” Loftus said.

HARDI members do not receive financial compensation in exchange for their monthly sales data and can discontinue their participation in the survey without prior notice or penalty. Participation is voluntary, and the depth of market coverage varies from region to region.

An independent entity collects and compiles the TRENDS data, which can include data on products not directly associated with the HVACR industry.