Industry Cold Winter! Weak demand dragged down the October shipments of HVAC equipment in the United States by nearly half. UBS warns that recovery will have to wait until the second half of 2026.

UBS Group AG recently released a research report stating that due to the continued weakness in the residential market, the October shipment data for heating, ventilation, and air conditioning (HVAC) provided an early observation for the fourth quarter - air conditioning/heat pump unit shipments decreased by 49% year-on-year, while actual channel sales decreased by 1%. Overall, shipments remain very weak, especially in the residential market. This is consistent with the softening trend mentioned by related companies recently. For example, Carrier Global Corporation (CARR.US) recently stated that its residential HVAC business performed worse in the fourth quarter than previously expected (guidance for sales decreased by 40% year-on-year). UBS Group AG pointed out that the October data released by AHRI showed a 49% year-on-year decrease in air conditioning/heat pump unit shipments, with both air conditioning and heat pump shipments decreasing by over 40% each. In terms of scale breakdown, residential market unit shipments decreased by 50% year-on-year, further worsening from the 43% decline in August. Commercial market unit shipments were also weak, down 18% year-on-year. Furnace shipments also decreased by 13% year-on-year. Data from the Heating, Air-conditioning & Refrigeration Distributors International (HARDI), which reflects actual channel sales, showed that sales in October decreased by 1% year-on-year on the same invoicing days, compared to flat performance in September. This means that excluding price/product structure effects, sales are still in negative growth, reflecting a weak end customer/actual sales environment. Looking at other driving factors, weather may be a positive factor, with heating degree days increasing by 12% year-on-year, although still 5% lower than the five-year average. Looking ahead to the remainder of the fourth quarter, UBS Group AG expects the HVAC industry to remain weak for the rest of the year due to challenging year-on-year comparisons and weak end consumer demand. The headwinds of destocking are expected to continue until the first quarter of 2026, followed by improvement in the second half of next year as year-on-year comparisons improve and demand stabilizes. It is reported that related targets in the US HVAC industry include Lennox International Inc. (LII.US), A. O. Smith Corporation (AOS.US), SPX Technologies (SPXC.US), Trane Technologies (TT.US), Carrier Global, and Johnson Controls (JCI.US).