Member Insights: Week 3 Pulse Survey Results on Impact of COVID-19

BY Sarah Jilbert and Brandin Bursa
4/29/2020 - COVID-19

We sent our third Weekly Pulse Survey to distributors and manufacturers on Friday April 24th, to see a snapshot of the industry and how it’s changing week by week, in response to COVID-19.

Note that these results are not statistically significant but provide a general “pulse” of where the industry sits. 

The Weekly Pulse is a complement to our scientifically significant Monthly Sales TRENDS Reports.  Please contact Sarah if you’re interested in learning more about this report.

Distributor Snapshot (113 respondents)

Weekly Sales:

As seen in the graph below, sales activity this week compared to last week was all over the board.

    • 38% of respondents reported their sales were down less than 20% compared to last week
    • 23% of respondents reported their sales were down between 21-50% compared to last week
    • 4% of respondents reported their sales were down more than 50% compared to last week
    • 13% of respondents reported their sales were steady compared to last week
    • 22% of respondents reported their sales increased compared to last week

The Central, Northeastern, Midatlantic and Southwest regions all had over 20% of respondents state that sales are up more than 5% compared to last week.

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Weekly Employment Changes:

  • 66% have not made any employment changes this week
  • 16% have reduced employee hours compared to 24% last week
  • 4% have laid off employees compared to 11% last week
  • 5% have reduced employee compensation compared to 9% last week
  • 6% have furloughed employees which was the same as last week
  • 7% have hired new employees compared to 5% last week

Customers:

  • During the week, 59% of participants indicated their customers have applied or plan to apply for a loan, 23% indicated their customers are shutting down (compared to 20% last week), 77% indicated they are still seeing business (up from 65% last week) and 13% indicated their customers need more help.
  • 47% of respondents have seen no recognizable change to customers paying performance this week. 38% have less than 15% of their customers extending payment schedules compared to 36% last week. About 5% of respondents this week and last week responded that more than 15% of their customers are extending payment schedules. 13% of respondents believe the customer payment experience is deteriorating and having a negative impact on operations compared to 17% last week.

Suppliers:

  • Similar to last week, 63% of respondents indicated they have not experienced supply chain disruptions this week while 22% of respondents have experienced parts disruptions (up from 17% last week) and 19% experienced equipment disruptions (up from 16% last week).
  • 56% of respondents have heard there will be no expected product shortages from suppliers, which is up from 50% last week. 35% expect product shortages, 5% expect prices to increase and 22% do not expect prices to increase.
  • 61% of respondents have not asked their supplier for extended terms, which compares to 75% last week. 25% have asked their supplier for extended terms and were accommodated with no penalty (up from 20% last week). 14% have asked suppliers for extended terms but they were not able to accommodate.

Supplier Snapshot (44 respondents)

Weekly Sales:

  • 55% of respondents reported their sales were down less than 20% compared to last week
  • 29% of respondents reported their sales were down less than 21-50% compared to last week
  • 5% of respondents reported their sales were steady compared to last week
  • 11% of respondents reported their sales increased compared to last week

Weekly Employment Changes:

  • 73% reported no change in employment this week
  • 9% have started to hire or rehire employees compared to 2% last week
  • 5% reduced employee hours compared to 11% last week
  • 7% reduced employee compensation compared to 21% last week
  • 18% have laid off or furloughed employees this week, which was the same as last week

Customers:

  • During the week, 84% of respondents expect no issues meeting orders placed by distributors. 9% expect challenging meeting parts orders (up from 5% last week) and 7% expect challenges meeting equipment orders (up from 2% last week).
  • 30% of respondents have seen no change to customers paying performance. 65% reported that less than 15% of their customers are asking for extended payment terms (up from 49% last week) and 2% reported that more than 15% of their customers are asking for extended payment terms.

Production Facilities:

  • 91% of respondents have open facilities and are producing product
  • 9% have experienced a closure this week due to COVID-19

Organization Overall Morale

To get a sense of overall organization morale & confidence from HARDI members who participated in the survey; we provided a slider bar that could be adjusted from 0 (bad) to 100 (great).

The average of all responses was 69. Given all the challenges that coronavirus has caused, the HVACR industry seems to have a positive outlook on the future and are maintaining suitable levels of employee morale.

There were two respondents who answered 100, five who answered 90 or above and 12 who said 80 or above. The lowest respondent selected 19 so there is a range of feelings certainly being experienced.

We will continue to monitor morale & confidence in the coming weeks as the country slowly starts to reopen.

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For questions about Pulse, or to join HARDI to participate in Pulse or the Monthly Sales TRENDS Reports contact: 

Wholesaler Account Manager, Sarah Jilbert at sjilbert@hardinet.org.
Supplier Account Manager, Brandin Bursa at bbursa@hardinet.org.