Heating, cooling, and refrigeration distributors reported a modest revenue dip in October as the HVACR industry manages high inventories, shifting refrigerant regulations and a slower start to the heating season.
Sales among members of Heating, Air Conditioning and Refrigeration Distributors International (HARDI) decreased 1% year over year in October, according to the association’s latest TRENDS report released Dec. 3. Annual growth remained positive, however, up 3.5% for the 12 months through October.
“It was a difficult comparison,” said Brian Loftus, HARDI’s macroeconomic and residential market analyst. “Five of our seven regions had double-digit sales growth during October of 2024 after the trail of damage left by hurricanes Helene and then Milton.”
Even so, the underlying data underscores a cooling market. Distributors have been contending with inventory carried over from a sluggish summer demand cycle — monthly shipments fell around 20% in June, July, and August — before plunging 33% in October, according to the report.
Loftus said those elevated stock positions are still a drag on new orders. “The ordering pause has allowed the Sales-to-Inventory ratio to begin to recover, but it remains well below pre-Covid normal levels,” he said.
The report arrives as the industry continues its shift to lower-global-warming-potential refrigerants such as R-454B, which are replacing R-410A under phasedown mandates. Contractors and distributors say the transition has created mismatches between the equipment being installed and the systems still widely in service — contributing to uneven demand and caution around replenishing inventory.
Despite the softening top line, payment behavior remains stable. Days sales outstanding — which tracks how quickly customers pay their invoices — held near 38 days in October, unchanged from a year ago.
“The top-line growth could inspire concerns about economic vitality, but that is offset by the steady payment timeline by HARDI customers,” Loftus said.
HARDI represents more than 490 wholesale distributors and over 5,000 branch locations across North America and Latin America. The monthly sales survey is voluntary, with data collected by an independent entity and inclusive of some product categories outside traditional HVACR.
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