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ZEN Industries eNewsletter:
December 2018

Tariffs and Trends in HVAC

2019, a Year of Challenge and Promise

HVAC Industry TrendsIn a time of changes, the future is always uncertain.

As we head toward 2019, change is impacting the HVAC industry on several levels and it remains unclear how forces like tariffs, regulations, and trends in technology will ultimately balance out.

The good news is that the domestic HVAC industry continues to grow. According to the HVAC Insider, HVACR manufacturers reported positive sales growth in 2018 and 87% of respondents expect continued growth across all market segments in 2019.

The U.S. Bureau of Labor Statistics predicts that the market for HVAC labor is set to grow by at least 9% over the next 8 years, which means adding upwards of 12,000 new jobs for sheet metal workers.

Building construction has been strong in 2018, which is good for the HVAC industry. Office construction is up 14.7% and commercial space is up 8.4%.  However, according to an article by Kim Slowey at ConstructionDive, there is some concern that office construction could slow in 2019.

As always, there are forces at play in the HVAC market sure to have unforeseen consequences for both good and bad. The ones making the most headlines today are tariffs and trade wars. While international trade is a complex subject, reliable consequences of things like tariffs and trade wars include:

  • Volatility in the HVAC market

  • Greater difficulty in accurately quoting HVAC jobs

  • Passing increased costs on to the customer

One concern in the HVAC industry is that current US domestic steel and aluminum production capacity is too small to meet domestic needs. While tariffs may ultimately spur domestic production, the immediate future is likely to be one of price increases.

Increased prices for new installations could provide incentives for end users to opt for repair over installing newer, more efficient systems, or even delaying projects until international relations are more settled.

New Regulations

Department of Energy LogoJoining the forces of growth and trade uncertainty in 2019 are new compliance guidelines from the Department of Energy.

Billed as “largest energy-saving standard in history,” the DOE divided its new standards into two phases, with the first taking effect at the beginning of this year. Phase One focused on energy-efficiency increases in all air conditioning RTUs by 10 percent, effective January 1, 2018. Phase Two, slated for 2023, ups the efficiency increase requirement to 30 percent and includes warm-air furnaces as well.

While new regulations are often thought of as restricting, the DOE projects that “contractors and distributors can expect a 45 percent increase in sales by retrofitting or implementing the new RTUs on commercial buildings.”

That said, it’s a complex change, and geography, climate, and topography will all affect how the new codes are adopted, state to state.

Technology Trends

Advanced TechnologyAt the same time trade disputes and new regulation buffet the market, technology in the HVAC field continues to advance at a rapid pace.

According to an article on the Aeroseal website, there are no fewer than 40 Amazing HVAC Industry Trends. A few of these include:

  • Demand for HVAC equipment is forecast to increase 6.8% next year, reaching a total market of $20.4 billion.

  • Ductless HVAC systems could come to represent up to 15% of the total industry revenues in the next 5 years.

  • Electronic air cleaners are already 40x more efficient than traditional filters and improving.

  • Many HVAC companies are automating their sales and service processes, allowing them to cut customer acquisition cost and keep pricing competitive.

Advancing technology in HVAC generally provides for cost-savings in energy efficiency and lower lifetime maintenance. The savings are often so significant that a greater upfront cost offers no barrier to investment. 

Choose ZEN Industries as Your Service Partner

Dan Zenisek of ZEN IndustriesHow can you confidently run your HVAC business in a time of conflicting forces with uncertain outcomes?

Find an experienced service partner, one with the experience to help guide you through the rough spots and take advantage of your opportunities.

In anticipation of a changing HVAC market, ZEN Industries has developed a comprehensive suite of services that HVAC contractors can take advantage of.

These include:

  • Precision Estimating. Our experienced teams use the latest software in ways that help you boost sales, decrease turnaround time on quotes, and streamline the entire sales process.

  • Shop Drawings and Take Offs. We deliver up to 50% faster than traditional turnaround times, eliminating drafting errors and meeting SMACNA standards with ease.

  • Coordination Drawings. Working with Building Information Modeling (BIM) data, we can precisely position ductwork in virtual models, eliminating conflict between the trades on-site and resulting in significant savings.

  • Duct Fabrication. With 20-years’ experience on the cutting edge of the industry, our coil lines and plasma tables are among the most efficient in the business, giving you a pricing edge even over bending sheet metal in house.

  • Proactive Delivery. Our premium service shrink-wraps and labels duct so that installation crews receive precision cut puzzle pieces they can hang and bang with ease. On large jobs, we can time delivery floor by floor or area by area, to avoid confusion as to which resources are used where.

Throughout the entire process we work to optimize the number of standard lengths of duct and minimize the number of joints and fittings.

At ZEN Industries, we’ve seen automation and improved workflow processes deliver real cost savings between 30% and 35% in an industry where labor is becoming scarcer and more valuable by the day.

Want to hear more, call us at 877-600-0274, or visit our Contact Us page today!

The ZEN Way

When you put our unique approach together with our time and money saving processes, what do you have? We call it The ZEN Way, and it results in proven cost savings of between 30% and 35%.

Those are the kind of savings that allow HVAC contractors to grow their business and dominate their local markets. At ZEN, our greatest satisfaction comes from playing a part in your success.

Call us today at 877-600-0274, or send us your inquiry using our easy Contact Form.


Success in All About Great Service

The quality of our HVAC duct work is of the highest caliber and our price is competitive with the best in the industry. Of course, ZEN Industries Inc. gains its edge with unbeatable service, and service means people - it's about our experienced personnel and the relationships we build with each and every customer.

Learn more at www.ZENindustries.com

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