Supply Chain Issues

Supply Chain Issues Create HVAC Product Shortages

The supply chain issues continue to create HVAC product shortages, and businesses incur increased costs for parts and equipment in the HVAC industry. As these materials are necessary for HVAC companies to provide installations and repairs, this is resulting in an increased time frame and cost for HVAC services on the local scale. Discover what is causing the supply chain issues in the HVAC industry. Also, look at the related effects of having these issues, which are passed along to customers with increased pricing.

HVAC Product Shortages

Due to the COVID-19 pandemic, more than 36.9 percent of workers switched to telework. That is the formal way of saying, “I work from home,” according to the US Census Bureau. As a result, more people are making room for telework in their new or remodeled home office. Forbes reports 70 percent of homeowners did a remodeling project during the pandemic. Multi-use spaces were in high demand as a way to transform rooms into bedroom/home office/lounge to accommodate more telework.

Here is where the increase in demand for HVAC and subsequent HVAC product shortages were first noted. The more homeowners taking on remodeling projects that require HVAC installation and repairs require more time and resources from HVAC businesses. This also reduced the amount of supply of equipment and parts available to the typical HVAC customer. However, this was only the beginning of the supply chain issues.

Increased Lead Times

The next concern has been supplying HVAC companies with equipment and parts in a timely manner. With more than one-third of the nation working in telework positions and not in labor and machinery jobs, this also impacted the HVAC industry. Fewer people working in all industries and the change in how work has progressed due to the pandemic—plus all of the jobs that were put on a stand-still at the start of it—has reduced lead times for production teams. There simply aren’t enough people available to get the jobs done fast enough. Coupled with other supply chain issues, this has only exacerbated the problem of getting certain equipment types fast enough.

Labor Shortage Challenges

Labor shortages compound issues in manufacturing as input costs rise at an accelerated rate. A major cost has resulted from the pandemic as more stringent methods of cleaning and sanitization, as well as testing for COVID-19, are implemented. This all costs more money for new hires, which is out of pocket for the majority of business owners.

At the same time, the White House states there was a job rate increase of 540,000 per month from January to June of 2021. However, there were still a record number of 8.3 million jobs open for employment in April of that same year. This is because certain industries are being hit harder, especially in hospitality and tourism, but also in restaurants and construction. Delays in the supply chain are critically a factor in several of these industries, including construction, manufacturing, and trade.

Finding talented, experienced workers to manufacture HVAC equipment, and to work for HVAC installers, is becoming increasingly as challenging as the supply chain issues associated with getting equipment and parts in a timely and costly manner.