Member Insights: Week 4 Pulse Survey Results on Impact of COVID-19

BY Sarah Jilbert and Brandin Bursa
5/6/2020 - COVID-19

We sent our fourth Weekly Pulse Survey to distributors and manufacturers on Friday May 1st, 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 (111 respondents):

Weekly Sales:

  • 36% of respondents reported their sales were down less than 20% compared to last week
  • 22% of respondents reported their sales were down 21-50% compared to last week
  • 2% of respondents reported their sales were down more than 50% compared to last week
  • 12% of respondents reported their sales were steady compared to last week
  • 19% of respondents reported their sales increased less than 10% compared to last week
  • 9% of respondents reported their sales increased more than 10% compared to last week

The table below shows how sales, compared to the prior week, have changed over the past three weeks. The week of 4/13 we had 8% of respondents see an increase in sales and now the week of 4/27 we see 28% of respondents indicate an increase in sales.

Screen Shot 2020-05-06 at 11.09.41 AM

Weekly Employment Changes:

  • 72% reported no employment changes this week
  • 5% have reduced employee compensation, which was the same as last week
  • 6% have reduced employees' hours compared to 16% last week
  • 5% have laid off employees compared to 4% last week
  • 6% have furloughed employees, which was the same as last week
  • 3% have rehired employees, which was the same as last week
  • 9% have hired new employees compared to 7% last week

The table below shows how weekly employment changes have been trending since Week 1 of the Pulse Survey. The percentage of participants reducing employee hours has gone down from 32% in Week 1 to 6% in Week 4.

Screen Shot 2020-05-06 at 11.11.53 AM

Customers:

  • 69% of respondents stated that none of their customers have gone out of business. 25% responded that less than 5% of their customers have gone out of business, 1% responded 5-10% of their customers have gone out of business, 1% stated that 20-30% of their customers have gone out of business and 4% claimed they weren’t sure yet.
  • 44% of respondents have seen no recognizable change to customers paying performance this week. 44% have less than 15% of their customers extending payment schedules compared to 38% last week. About 5% responded that more than 15% of their customers are extending payment schedules. 5% of respondents believe the customer payment experience is deteriorating and having a negative impact on operations compared to 13% last week.

The table below shows how customers payment ability has changed week by week since the Pulse survey started. There have not been significant changes in the percentage of respondents’ customers changing their payment performance.

Screen Shot 2020-05-06 at 11.12.38 AM

Suppliers:

  • 68% of respondents indicated they have not experienced supply chain disruptions this week while 15% experienced parts disruptions (compared to 22% last week) and 14% experienced equipment disruptions (compared to 19% last week).
  • Similar to last week, 57% of respondents have heard there will be no expected product shortages from suppliers. 34% expect product shortages, 7% expect prices to increase and 28% do not expect prices to increase.
  • 65% have not asked their supplier for extended terms, which compares to 61% last week. 23% have asked their supplier for extended terms and accommodated with no penalty (compared to 25% last week).

The table below shows how respondent’s requests for extended terms has changed over the past four weeks.

Screen Shot 2020-05-06 at 11.14.35 AM

Supplier Snapshot (49 respondents):

Weekly Sales:

  • 35% of respondents reported their sales were down less than 20% compared to last week
  • 31% of respondents reported their sales were down 21-50% compared to last week
  • 6% of respondents reported their sales were down more than 50% compared to last week
  • 10% of respondents reported their sales were steady compared to last week
  • 8% of respondents reported their sales increased less than 10% compared to last week
  • 10% of respondents reported their sales increased more than 10% compared to last week

The table below shows how sales, compared to the prior week, have changed over the past three weeks. The week of 4/13 we had 6% of respondents see an increase in sales and now the week of 4/27 we see 18% of respondents indicate an increase in sales.

Screen Shot 2020-05-06 at 11.15.24 AM

Weekly Employment Changes:

  • 65% reported no employment changes this week
  • 8% have reduced employee compensation compared to 7% last week
  • 10% have reduced employees' hours compared to 5% last week
  • 6% have laid off employees compared to 4% last week
  • 10% have furloughed employees compared to 14% last week
  • 0% rehired new employees compared to 4% last week
  • 8% have hired new employees compared to 5% last week

Customers:

  • 88% of respondents expect no issues meeting orders placed by distributors. 10% expect challenges meeting parts orders (compared to 9% last week) and 2% expect challenges meeting equipment orders (compared to 7% last week).
  • 45% of respondents have seen no change to customers paying performance. 47% reported that less than 15% of their customers are asking for extended payment terms (compared to 65% last week) and 8% reported that more than 15% of their customers are asking for extended terms.

Production Facilities:

While production within HVACR has remained strong both in the United States and abroad, that does not mean our industry has been unaffected.

This week we saw an increase in the number of facilities closed due to COVID-19 for the first time in three weeks. Week 1 had 19% of respondents report closure, Week 2 had only 8%, Week 3 had 9% but in Week 4, we see that number jump to 18%. 

  • 82% responded with no closures to production facilities this week
  • 18% have had production closed due to coronavirus

Optimism Index:

With measured hopefulness, we saw the Optimism Index rise from 69 last week so a blistering 71 this week. Let’s keep this meteoric rise going!

Picture1-10

HARDI Pulse_5.6.20-01


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.