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The Abnormailty of the New Normal

The Abnormailty of the New Normal

It would appear that the “new normal” is that nothing is normal. In the HVACR market, the highs and lows of economic activity seem to be increasingly wildly divergent. This time last year, it seemed that equipment sales might indicate continued reluctance by equipment owners to invest during 2014. Yet, AHRI’s Nov. 20, 2013 report (detailing equipment sales through September) indicates YTD totals higher than 2012’s: +14.5% for furnaces (gas and oil combined) and +9.6% combined for air conditioners and heat pumps.

So a slow 2012 didn’t necessarily hinder equipment sales from manufacturers to wholesalers in 2013. Perhaps consumer confidence is a better harbinger of future industry activity. At the end of 2012, the Consumer Confidence Index (prepared by The Conference Board – indicated consumer confidence was improving, with the metrics of “those expecting business conditions to improve over the next six months” and “those anticipating more jobs in the months ahead” both up slightly at the time.

The most recent Index, released Oct. 29, 2013, has both of those metrics down sharply from the prior month – which was already declining. Individuals expecting an improvement in business conditions dropped from 20.6 percent to 16.0 percent, and at the same time those who expected business conditions to worsen jumped to 17.5 percent from 10.3 percent. On the labor front, those anticipating more jobs in the months ahead dropped from 16.1 percent to 15.3 percent.

If consumers – residential and light commercial equipment owners – remain skittish about their financial futures, it seems reasonable to anticipate continued hesitation in 2014 to replace equipment until absolutely necessary. As has been the case for the last several years, repair parts and service contracting will likely remain in high demand. When the time comes to replace equipment, the conversation regarding lowest first cost versus lowest life cycle cost can then be had.

Forces outside the industry continue to impact, both in the public awareness and regulatory arenas. Energy efficiency is growing in the mind of students nationwide. Programs such as The Alliance to Save Energy’s (ASE – PowerSave Schools teach students at all levels of primary and secondary education the simple ways they can impact power consumption.

While this program doesn’t directly teach about HVACR energy consumption, the basis for its success rests on providing teachers in K-12 programs with math lesson plans based on energy efficiency examples. This kind of direct placement of educator tools that also introduce real-world scenarios to students is one of the strategies the HVACR Workforce Development Foundation ( has considered.

With a mission to “attract committed and skilled employees to a career in HVACR,” the recently launched Foundation is exploring a number of paths to introduce HVACR to students at a young age. In addition to lesson plans like ASE’s, the Foundation will host a pavilion exhibit during the 2014 Science & Engineering Festival (

The entire mission of this festival is to spark kids’ imaginations with regard to STEM (science, technology, engineering and math) and how entire industries with hundreds of thousands of jobs are based on STEM. The Foundation intends to show 250,000 kids how HVACR is not only an essential part of their lives, but how meaningful, lifelong careers can be built around it!

The workforce shortage underlying formation of this Foundation continues to weigh heavily on the minds of regulators and utilities across the nation. In California, the Western HVAC Performance Alliance ( continues to explore gaps in Workforce Education & Training relative to HVAC installation and maintenance, and the impact those gaps have on achieving energy efficiency goals.

Although not yet formal, there is a growing sentiment across industry sectors – commercial, residential, new construction and existing buildings – that creation of a sufficiently educated and trained workforce can no longer be left as a voluntary decision. Much like the plumbing and electrical trades need a licensed contractor who employs certified practitioners or apprentices, it is likely that soon regulators will hear recommendations to similarly establish a minimum measure of competency to install, service and/or maintain HVACR equipment.

Other recommendations for HVAC practitioners will likely include more “whole building” education. Although “performance contracting” is growing rapidly among progressive HVAC contractors utilizing programs from national organizations like ACCA, BPI and NCI, the contractor community at large is slow to embrace or understand this concept. It may take additional incentives from utilities and/or regulatory agencies to encourage widespread adoption.

At the federal and international levels, the regulatory environment doesn’t show any signs of relenting for the HVACR industry. After several years of slow traction, the North American-led effort to expand the Montreal Protocol to include HFC refrigerants seems to be making headway largely due to China’s President Xi announcing in June 2013 that his country would cooperate to do so. U.S. experts such as Danfoss’ Robert Wilkins project such an amendment to the Protocol as early as the end of 2014.

Not content to wait for how such an amendment might impact U.S. market activity, the EPA has indicated it will continue utilizing existing tools such as the SNAP program to impact decision makers as they evaluate alternative refrigerants. In addition to additional HC-class refrigerant uses under consideration beyond the original 2012 allowed uses, it is possible the EPA will de-list currently acceptable HFC alternatives to accelerate adoption of other low-ODP refrigerants that are also low-GWP. Naturally occurring refrigerants such as hydrocarbons, CO2, ammonia, water, etc., are the increasingly favored choices in Washington.

At the risk of singing the same song every year, the solutions to thriving in a constantly changing, wildly divergent “new normal” remain the same: Dedication to remaining current with evolving technologies and regulations, obtaining industry-backed education and certifications and constantly networking with professional peers to stay ahead of the trends.

Mark Lowry is executive vice president of Refrigeration Service Engineers Society (RSES). Contact him at 800/297-5660 x4051, [email protected] or visit

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