Downstream Products
March 17, 2026
Heating and cooling equipment shipments fall back in January
Written by Brett Linton
Heating and cooling equipment shipments declined 12% from December to January, according to the latest data released by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI).
This marks the second-lowest shipment rate recorded in the past nine years, just 65,000 units above the low set last November. Historically, shipments are strongest in the early summer months and weakest around the turn of the year, primarily impacted by seasonal air conditioner and heat pump volumes.
January shipments totaled 1.39 million units, 18% lower than the same month last year (Figure 1, left). Shipments of water heaters and warm-air furnaces declined month over month (m/m), while air conditioners/heat pump shipments increased.
Shipments can be annualized using a 12-month moving average (12MMA) to smooth out seasonality. On this basis, shipments have trended lower since last May, following their two-year peak of 1.89 million units. Through January, the 12MMA is down to a five-and-a-half-year low of 1.69 million units (Figure 1, right).
Shipments by product
- Previously at a nine-month high, shipments of water heaters fell 19% m/m in January to 729,000 units, down 8% year over year (y/y).
- Warm-air furnace shipments slipped to a near two-year low of 221,000 units, down 19% m/m and 20% y/y.
- Shipments of air conditioners and heat pumps increased 8% m/m for the second month in a row, rising to 441,000 units. Recall that just two months prior, shipments fell to a ten-year low of 379,000 units. January shipments are still down 29% y/y, marking the ninth 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 furnace shipments remain strong, water heater shipments are relatively flat, and air conditioners/heat pumps shipments are down considerably:
- Annual warm-air furnace shipments experienced the largest gain, with the January 12MMA up 1% from the same period one year prior. While this marked the 15th straight month of annual gains, growth has been shrinking across the past eight months.
- Water heater shipments briefly saw an annual gain in December but turned back negative in January, down less than 1% y/y. This rate has steadily trended lower since peaking in mid‑2024.
- Annualized air conditioner and heat pump shipments were down 23% y/y, the fifth consecutive month with negative annual growth and the largest annual contraction rate in our 16-year data history.
