It serves the HVAC contractor no good to be Pollyanna during this COVID-19 crisis and stick their head into the sand on what is going on around them. On the flip side, it does no good to take a glass-half-empty approach and let the downturn of your business become a self-fulfilling prophecy.
I would like to address the latter today. It is hard in this 24-hour news cycle that focuses on and sometimes over-dramatizes the negative. But many in the HVAC industry are fighting that. I know because I am communicating with them. There are many reasons to be bullish on the HVAC industry going forward. Here are the top five:
1. HVAC is essential: HVAC contractors are not running a gym, hair salon, or restaurant. This means they can be open in any state in the country. We always knew HVAC was essential … now the rest of the country has realized it. This comes at a time when a great majority of people are working out of their homes. At no time in recent memory has temperature and indoor comfort been on the top of people’s minds the way it is today. In places in the Midwest, homeowners can normally fight through hot days with a broken air conditioner by going to the movies or out to a restaurant for a few hours. That is not the case during this stay-at-home order. People want to be comfortable in their homes now more than ever.
2. Pent-up demand: The ACHR NEWS runs the AHRI shipment numbers every month. It is a fairly interesting way to track how the industry is doing. More products being shipped tends to mean each part of the distribution channel is making more money. I started in this industry in 2003. At that time, the HVAC industry was in the midst of an impressive increase in shipments. Record years continued until the industry peaked in shipments in 2005. This included almost 6.5 million air conditioners.
I was never very good at math, but that takes us back 15 years. That is just about (albeit on the lower end) of the lifespan of an air conditioner, depending on what area of the country you are located. Odds are that unit might have been repaired a time to two, and the homeowner is now ready to replace.
3. Unemployed demographics: I heard an interesting observation on unemployment when listening to Service Roundtable CEO Matt Michel being interviewed on a HARDI video series.
“When I look at the unemployment numbers, those are terrible, and I hope we can solve those quickly,” Michel said. “But remember, the people that are going to be unemployed first are usually renters and not homeowners. A lot of the homeowners are still working. They are working from home, and they have to be comfortable.”
4. Weather, weather, weather: The numbers we are hearing from contractors don’t sound great. And no doubt that has to do something with COVID-19. But it is not entirely COVID-19. It has to be at least partly because I am writing this in my home office in Metro Detroit on April 23 and I see snow falling outside. As HVAC contractors know, weather can make up for a lot of business problems. The industry might be one very scorching summer from being back on track.
5. Economists are positive: If you have ever been to a HARDI meeting, you know economist Alan Beaulieu is entertaining — but most importantly, he knows his stuff. He was recently on a podcast with Floor Daily and was in a positive mood when talking about what is in store for the economy.
“We think it will be more of a V-shaped recovery. After the 2008-09 recession, it was a very slow rise up that seemed to take forever to climb,” Beaulieu said. “Things were moving rather nicely globally and domestically, and then this thing hit us. It hit us hard. But since everything was going up, it looks pretty good for a nice rebound on the other side.”
So there you have it. A few reasons to be bullish on HVAC. Remember, the decisions you make today will result in what your business looks like when this pandemic is over.
