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Heating, Air-conditioning & Refrigeration Distributors International (HARDI) released its monthly TRENDS report, showing the average sales performance by HARDI distributors was a decline of 2.8 percent during June 2019.
The average annualized sales growth for the 12 months through June 2019 is 9 percent.
"This was the second consecutive month when the average monthly sales performance was a decline. We have not had back-to-back declines since battling the remnants of the last recession in early 2010. The decline is understandable given the challenges in June," said HARDI Market Research and Benchmarking Analyst Brian Loftus. "All the regions had one less billing day than the prior year. Five of the regions had fewer cooling degree days than June 2018. And the heavy rain from May persisted into June in parts of the Southwest and Southeast."
The Days Sales Outstanding (DSO), a measure of how quickly customers pay their bills, continued to be unusually low for this time of year. "Typically the DSO increases during the second calendar quarter as cooling season gets rolling," said Loftus. "That was not the case this year with soft sales that have been paid promptly.
"We see softer end market demand from the housing market with declining existing home sales and relatively flat housing permits," continued Loftus, "but the underlying economy appears very healthy." GDP growth in the second quarter was more than 2 percent once again. That is encouraging performance for HARDI members along with the 4.3 percent growth of Personal Consumption Expenditures that included a 13 percent increase in durable goods, a gain of 6 percent for non-durable goods, and 2.5 percent for services.
HARDI members do not receive financial compensation in exchange for their monthly sales data and can discontinue their participation 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 data that can include products not directly associated with the HVACR industry.