AC, Heat Pump shipments drop 16.7% in 2023

AHRI recently released its December (and full-year 2023) shipment figures, showing year-over-year declines across the board.  

By the numbers: In 2023, Central AC and Heat Pump shipments dropped 16.7% compared to 2022, with December alone seeing a 29.3% drop.

• Shipments of gas warm air furnaces also took a yearly hit, down 22.8%.

Of note: AHRI’s shipment data is national, and although it’s collected, state-by-state data isn’t publicly available. Shipments also include new construction.

What’s going on: Jason Buehler, owner of Buhler Air Conditioning, points his finger at the low-interest rate, Covid-induced spending era, telling Homepros, “In 2020-2022, we literally eliminated a few years of future demand.”

• From 2019 to 2022, shipments grew 22.6%.

The big picture: Matt Michel, co-founder of Service Roundtable, looks past Covid and back at history, telling us over the phone, “Today’s replacement market is governed by what was installed 15 years ago.” 

• From 2005 to 2009, shipments contracted 40%, becoming what’s now known as “the shipment cliff”.

What’s next: Michel sees additional contraction in the replacement market this year, putting it simply in an article: “Contractors cannot replace what was not installed 15 years ago.”

• “In the latter half of 2021 we began seeing early evidence of the shipment cliff, though it was largely hidden due to price increases… In 2022, shipments were largely flat from 2021,” he added.

• Consumers may also choose to defer replacements as they face all-around uncertainty, especially considering it’s an election year.

But: Michel noted that contractors who tighten their service departments and ramp up marketing spend have the opportunity to take share this year.

Looking ahead: “Once we get past the shipment cliff, we can expect a 10-year run where demand will grow each year,” Michel said.

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