Heating, Air-conditioning & Refrigeration Distributors International (HARDI) released its monthly TRENDS report, showing sales by HARDI distributors declined by 5.4% during August 2024.

The annual sales growth for the 12 months through August 2024 is an increase of 1.3%. 

“After sales growth near 10% during July, a decline of 5.4% was a bit of a surprise,” said HARDI Macroeconomic and Residential Market Analyst Brian Loftus. “July sales had a boost from two extra billing days and August had one less billing day. We estimate August sales slipped by 1% with the same number of billing days which is very close to the adjusted results for July.”

The Days Sales Outstanding, a measure of how quickly customers pay their bills, was 37 days during August. “The post-Covid DSO for August has been near 40 the past few years,” Loftus said. “The DSO for July was unusually brisk also.  I wonder if the rapid turn is related to the modest pace of activity instead of a sign of exceptional financial health.”

Loftus said existing home sales have been declining for the past three years, with the help of Fed tightening for the past 2.5 years.

“Those factors helped squeeze the life out of distributor annual sales growth during the past 2.5 years," he said. "The rate cutting cycle has begun.  The annual sales growth rate of distributors can breathe again and will look much different next year at this time.”

HARDI members do not receive financial compensation in exchange for their monthly sales data and can discontinue their participation without prior notice or penalty. Participation is voluntary, and the depth of market coverage varies from region to region. An independent entity collects and compiles the data that can include products not directly associated with the HVACR industry.