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Fourth Quarter Fury in the World of HVACR

Sept. 10, 2013
Healthcare, manufacturing, and consumer spending are just a few of the areas that may make the fourth quarter of 2013 a bumpy ride for HVACR contractors and their employees.

I love reading The Wall Street Journal (WSJ) immediately on the heels of Labor Day. The paper usually examines what businesspeople in the U.S. can look forward to over the final four months of the year. And so, in the September 3rd edition, in the Marketplace section, WSJ put together a little something called, appropriately, “The Fall Business Preview.”

I found myself drawn to some of the WSJ’s observations with regard to the U.S. healthcare overhaul that, as of this writing, goes into effect on January 1, 2014. I’ve certainly written about this before ( and have even helped arrange for two speakers to address the issue during Comfortech 2013 in Philadelphia.

Mike Weil, Editorial Director

Of all the concerns about the Affordable Health Care Act — costs, penalties to owners, to consumers, fluid rules that change daily, concerns over how the program actually will work — nothing prepared me for what the WSJ covered in its fall preview: will the online insurance exchanges actually function?

There apparently is concern that when the initial websites go live in October, they might not work well or will crash. Here, I must quote the article:

“These online marketplaces — the state- or federally-run websites that list available health-insurance plans and calculate one’s eligibility for government subsidies — will be a major entry point for an estimated 7 million uninsured Americans shopping for coverage that starts Jan. 1, 2014. But insurers will have to wait and see how smoothly these online exchanges operate when they go live.”

What does this mean to HVACR contractors trying to help their employees decide which way to go with insurance? In a word: confusion.

The article goes on to say that most Americans who receive health care through an employer will soon face plan renewals with higher deductibles as businesses try to lower their per-employee health expenses. They will have the choice of going with a State or Federal plan (we think), but may be stuck if the system doesn’t work.

What happens then?


From an economic impact standpoint, the WSJ forecast predicts that manufacturing is slowing down, so investment in labor and capital spending will skid. If this happens, no doubt manufacturers will look at cost cutting and, in the HVACR markets, this could impact product availablilty, price, replacement parts, and more.

The Air-conditioning, Heating, Refrigeration Institute (AHRI) issued its latest (June) shipment figures showing increases in gas and oil-fired furnaces over those of 2012. The same is true of air condioning units. This is good. But if there is a manufacturing slowdown, this may change as the fury of the fourth quarter descends upon us.

Consumer spending

The WSJ article points out that the U.S just experienced lower-than-normal back-to-school sales which they say may lead to weak holiday shopping. Which means that consumers potentially are tightening their belts making the Fall furnace sales season more challenging. However, consumers will continue needing their mechanical systems serviced, so if you’re selling and servicing maintenance agreements, you should be in good shape.

The fourth quarter report in the WSJ also covered things such as next generation whiz bang consumer electronics (which eventually become whiz bang business management tools), the continuing evolution of the Internet as a TV medium (can you say training tools?), and changes in how small businesses can raise cash through equity sales. This may be the subject of a future editorial, especially in light of changes from the Securities and Exchange Commission that now allow companies to seek investors through social media  and traditional advertising. Talk about fury. More on that later. 

Yes the fourth quarter should be an interesting time of economic highs and lows. So buckle in and get ready — the ride starts now.