Heating, Air-conditioning and Refrigeration Distributors International (HARDI) announced average U.S. HVACR distributor sales increased 11.6% in October. The healthy double-digit gain was widespread with six of the seven reporting regions showing growth for the month and a nice rebound from the 4.7% decline in September.
The strongest results were in the West and Southwest, and a mid-teens growth stretched from the Central Region to the Southeast. Hurricane Sandy’s late October visit influenced the slight decline of sales for the Mid-Atlantic region, which in this case ranges from Maryland to New Jersey.
The strong results in October helped push the twelve-month rate of change to 3.9%. HARDI Economist Andrew Duguay said that this twelve-month growth rate is the highest in three months. “This reflects the positive consumer trends, rebounding residential construction market and general economic growth,” said Duguay. “The growth rate continues to be constrained by the mild business-to-business spending and ongoing challenges in commercial construction markets.”
The Days Sales Outstanding (DSO) also increased during the month. “The DSO may have ticked up, but that is to be expected with the strong sales performance,” says Brian Loftus, Market Research and Benchmarking Analyst, HARDI. “The absolute DSO level remains in the modest and considerably improved territory versus where it was early last year,” Loftus adds.
Next month will likely reflect the dark shadow of Hurricane Sandy. “We are encouraged by the positive tone of the economic indicators in general, so expect the negative impact of Sandy to be brief,” Loftus says. Sandy may not lead the industry over an economic cliff, but sluggish economies in Europe and Asia will continue to be a headwind by reducing demand for our exports and constraining our recovery.”