July shipment figures show heat pump slowdown

On Friday, AHRI released its July shipment figures, revealing year-over-year slowdowns:

• Warm Air Furnace shipments, including both gas and oil, decreased 29% from July of last year.
• Central AC and Heat Pump shipments were down 5% over the same period.

Notably, of the combined air conditioner and heat pump shipments in July, heat pumps experienced the largest individual decline, dropping 10% from last year (from 362,063 units to 326,771 units).

Source: AHRI

Big picture, shipment volumes have been relatively steady over the past five years, but there have been fluctuations:

• Warm Air Furnace shipments peaked in 2021 and have declined 26% since then.
• Central AC and Heat Pump shipments climbed 17% from 2020 to 2022 but declined 13% this year.

What’s going on? The drop in heat pump shipments may be an indicator that homeowners are waiting out economic uncertainties or the IRA rebates before pulling the trigger on an upgrade.

On recent earnings calls, Carrier, Trane, and Lennox each mentioned that although they’re seeing slight dips in their residential segments this year, they expect the upcoming rebates to drive growth in 2024 and beyond.

It’s also worth noting that this year’s drop is exacerbated by the elevated shipment volumes we saw in prior years.