Air conditioning shortage ahead of hot summer causes nationwide price spike
Can the AC industry stay cool ahead of summer shortages?
Air conditioning shortage leads to nationwide price spike
Fox Business' Gerri Willis has the details from Eastchester, N.Y. on ‘The Claman Countdown’
Summer could be hotter than expected as an air conditioning shortage heats up.
It follows a year of growth across companies within the HVAC category, with major manufacturers like Trane Technologies PLC up 24% year-over-year, while Raytheon Technologies ticked up 21% and Avis Budget Group surged nearly 125%.
It follows a year of growth across companies within the HVAC category, with major manufacturers like Trane Technologies PLC up 24% year-over-year, while Carrier Global ticked up more than 22% and Avis Budget Group surged nearly 125%.
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However, the proliferation of air conditioning units is outpacing supply. Shipping delays are rippling down the supply chain, resulting in a lack of inventory for components.
"If you want AC, you’ll have to wait four to eight weeks," FOX Business’s Gerri Willis told the "Claman Countdown."
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Demand for AC units is already surging ahead of looming droughts in the West and power grid issues in Texas. On the West Coast, some energy groups are warning that California is the U.S. region most at risk of power shortages this summer due to the state’s growing reliance on renewable energy sources like wind and solar.
In Texas, recent power outages and rolling blackouts that left millions without heat or electricity have unmasked vulnerabilities to the state’s grid. Energy experts point out that hot weather could further strain the grid, with one grid operator urging Texans to conserve power and "reduce electric use as much as possible" for a few days after heat waves caused a significant number of generation outages.
As a result, more Americans are turning to air conditioning systems in order to prepare for the hot months ahead.
Meanwhile, as more office buildings open back up, the need to replace units that have been dormant for the past year or upgrade to cleaner air alternatives in a post-COVID world is putting more strain on supplies.
Brad Dunn, vice president of marketing and sales of United CoolAir, tells FOX Business that fears of extreme weather and power outages to outdated or dull AC units have compounded to become the perfect storm for the industry.
One heating and air conditioning corporation in Eastchester, New York, already has a waiting list ahead of the summer season after booming sales. AMHAC, a family-owned business that installs and repairs air conditioners, is still waiting on some key components such as sheet metal, motors, circuit boards, copper coils and engines that help the units start.
Yet, it’s not only supplies that the company is waiting on- the workforce is also lagging behind. And according to the general manager at AMHAC, Natalie LLoyd, it’s an industry problem.
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"Our industry is booming, but unfortunately we don’t have enough tradesmen to come on board," Lloyd said. "We’re hiring, and we have a lot of demand and we’re ready to go to get the season off right."
Prices have increased over the past six months and are expected to continue to tick up, according to Dunn from United CoolAir. Component shortages are not the only source of blame- rising costs of fuel and inflation are also being passed down to the consumer. In 2021 alone, prices have already risen 15%.
Meanwhile, 68% of builders reported shortages of HVAC equipment in May 2021, which is delaying new construction and projects.
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As HVAC manufacturers anticipate more Americans to lean on air conditioning, experts are encouraging customers to plan ahead and put in orders as early as possible. Even though homeowners, builders and office managers at the brunt of the shortage, it's a boon for the manufacturers.
"If we’re going to have a problem, demand is a good one to have," Lloyd said.