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You are at:Home»News»Economic recovery slow but steady: report

Economic recovery slow but steady: report

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By Plumbing & HVAC Staff on July 27, 2021 News

The term recovery is applied in situations where there has been a return to some sort of normal state of “health, mind, or strength.” Or so says a quick google search of the word. This term has been thrown around a lot when it comes to the pandemic that has hit the world now for just over 17 months.

“The recovery from the 2020 COVID recession continues apace with inflationary pressures mounting,” according to the “Economic Outlook” report, completed by the Canadian Institute of Plumbing and Heating (CIPH) and the Heating, Refrigeration, and Air Conditioning Institute of Canada (HRAI). “Record high household savings, together with generous fiscal stimulus that has overcompensated households for income lost from unemployment and business closures, are fueling a resurgence in consumer demand that is outpacing supply for many good and services.” For instance, there has been inflation for building materials across Canada such as in the lumber or steel piping industries.

The report highlights how Canada is recovering from the recession due to the pandemic, with a specific emphasis on the HVAC and plumbing industry.

HVAC, Hydronics & Waterworks

Graph courtesy of Economic Outlook report

According to the report, HVAC sales in 2021 started off strong, outpacing the five‐year first-quarter average by 27 per cent, as ventilation upgrades help contain the spread of the virus provided a boost to sales. Hydronics sales increased by 11 per cent year‐over‐year in the first quarter of 2021, while waterworks sales increased by 39 per cent year‐over‐year.

Plumbing & PVF

The effects that pushed plumbing equipment, and pipes, valves and fittings sales lower in 2020 appear to have come to an end in the first quarter, with sales up 19 per cent and nine per cent, respectively. Strong housing sales in the first quarter will likely provide a lift in sales going forward as industry-wide lag effects take hold, as per the report.

Graph courtesy of Economic Outlook report

Sales of CIPH members increased in the first quarter of 2021, which marks the third consecutive quarterly increase, following decreases in sales for the first half of 2020 during the COVID-recession. At $1.9 billion in the first quarter of 2021, sales were 20 per cent higher than the same quarter in 2020.

Prices

Graph courtesy of Economic Outlook report

Prices for metal plumbing fixtures and valves decreased by 0.5 per cent year‐over‐year in the first quarter of 2021, lower than the rate of inflation.

In the residential air conditioning and furnace industries, 94,115 residential air conditioning units and 108,586 residential furnaces were shipped in the first quarter of 2021, which is up 135 and 71 per cent year‐over‐year, respectively, according to the report.

For the first quarter of 2021, there were 518 air handler units shipped, which is down eight per cent year‐over‐year. Sales in 2020 exceeded the five‐year average. The number of chillers shipped increased by four per cent, an increase of 10 units sold compared with the same period in 2020.

Commercial A/C, unit heater & ductless split systems

Commercial air conditioning units shipped in the first quarter of 2021 increased to 6,826 units, up four per cent compared with the first quarter of 2020. Sales of ductless split systems increased by 55 per cent in the first quarter of 2021, above the five‐year average. Unit heater shipments totalled 9,989 in the first quarter of 2021, up 59 per cent year‐over‐year.

Graph courtesy of Economic Outlook report

According to the report, prices of industrial and commercial fans and blowers increased by 0.8 per cent in the first quarter of 2021, year‐over‐year. In addition, warm air furnaces and electrical heating equipment and other heating equipment prices increased by 0.5 per cent year‐over‐year.

Provincial breakdown

The report broke down each province based on its economic decline and recovery. Ontario’s economy declined by about five per cent in 2020. However, Ontario’s economic growth is forecast to grow by five per cent in 2021 and another five per cent in 2022; this comes after declining by 3.8 per cent in 2020. British Columbia’s economy is forecast to grow by 5.7 per cent in 2021 and five per cent in 2022. Alberta’s economy experienced the deepest recession in Canada (down by 8.2 per cent) in 2020 with the collapse in oil prices, which is forecasted to grow by five per cent in 2021.

Manitoba and Saskatchewan economies declined by 4.8 per cent and 5.2 per cent also due to the collapse in oil prices, but in 2021, the economy is forecast to grow by 4.6 per cent in Manitoba and 4.4 per cent in Saskatchewan. Quebec’s economy declined by about 5.3 per cent in 2020 and is forecast to grow by 4.8 per cent in 2021 and five per cent in 2022. Atlantic Canada was the least affected region by COVID‐19 last year, with their economy declining only by four per cent in 2020 and is forecast to grow by 3.9 per cent in 2021 and 1.7 per cent in 2022.

For the full report, visit http://staging4.plumbingandhvac.ca/wp-content/uploads/2021/07/The-Outlook-01-Q2-2021.pdf.

 

Canada CIPH Economy HRAI HVAC Plumbing residential
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