HVAC equipment shipments down through October

US shipments of heating and cooling equipment fell 11% in October from September to the lowest monthly rate of the year, and an eight-year low, according to the latest data released by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI).

October shipments have generally been slightly above average, but this October came in much softer than usual. Shipments totaled 1.39 million units, 27% less than the same month last year (Figure 1, left), and the lowest total since February 2017. And shipments of warm-air furnaces and air conditioners/heat pumps both declined month over month (m/m), as did water heater shipments.

Trends

Shipments can be annualized using a 12-month moving average (12MMA) to smooth out seasonal swings. On this basis, shipments peaked in early 2022 after the post-Covid surge, then fell through late 2023. A recovery began in early 2024 and continued through May of this year, when the 12MMA reached a two-and-a-half-year high of 1.89 million units. That streak ended in June, and the 12MMA has fallen each month since. Through October, it stood at 1.74 million units, down 5% year over year (y/y), falling further vs. September (Figure 1, right).

Shipments by product vary

After expanding for the first time in six months in September, water heater shipments declined 2% in October to 733,389 units, down 9% y/y.
Shipments of warm-air furnaces declined 13% m/m to a year-to-date low of 248,000 units, also down 13% from the same month last year.
Air conditioners and heat pump shipments fell 22% m/m to a nine-year low of 413,000 units. October shipments are down 49% y/y, marking the sixth consecutive month of negative annual growth. Note that these shipments are highly seasonal, as shown in Figure 2.

Annual comparisons

Figure 3 shows the annual growth rate of shipments by product on a 12MMA basis. From this angle, annualized warm-air furnaces shipments remain strong, while air conditioners/heat pumps and water heater shipments are down:

Warm-air furnace shipments experienced the largest annualized gain, with the September 12MMA up 7% compared to the same period one year prior (the 12th straight month of annual growth). However, this growth rate has been shrinking over the last five months.
Air conditioner and heat pump shipments were down 12% y/y on a 12MMA basis. After 11 months of annual growth, October marks the second straight month of contraction; the 12MMA growth rate has declined sharply since May.
Water heater shipments contracted for the ninth consecutive month, down 2% y/y. This rate has trended steadily lower since the mid‑2024 peak.

David Schollaert

David Schollaert is deputy editor-in-chief for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. He can be contacted at david@steelmarketupdate.com or 724-720-1008.