KELOWNA, B.C., CANADA - A North American economic outlook prepared for Heating, Refrigeration & Air Conditioning Institute (HRAI) of Canada members and presented at their general meeting here in September by the Bank of Montreal predicted continued short-term gains and a robust national economy.
According to Rick Egelton, senior v.p. and deputy chief economist for the bank, an easing in growth seems likely, tied to a less robust stock market and rising oil prices. Along with low, low unemployment, wage rates have increased. So far, he said, a surge in productivity growth coupled with a strong U.S. dollar have kept core inflation in check. "But it won't last," he warned. As a result of higher core inflation and pressure on the stock market, growth will slow late in 2001.
New housing starts are expect to drop from a near-historic high in the second quarter of 2001 to a three-year "low" in the third quarter - although that is not a low by historical standards. However, continued strength allows more spending in computers. That, along with lower computer-software prices, spurs more gains in productivity, which further fuels earnings and profits. More gains could be realized through growth in Internet access, such as virtual stores, improved information flow, inventory control, and lower supply chain costs.
Meanwhile, HRAI's Annual Statistics Forecast for 2001 indicates hvac shipments will show a modest increase over 2000. HRAI says the largest change will be in commercial ac shipments, up 3%, followed by residential furnace shipments, up 1%, and residential ac shipments at less than 1%.
For commercial ac, 1999 shipments totaled 44,496 versus a projected year-end drop of 8% to 40,700 for 2000 but 41,800 predicted for 2001.
The projected total for residential ac for 2000 is 215,600, rising to 216,600 for 2001. Residential furnaces should finished 2000 at 253,300 units, up 11% from 1999, but rising to only 255,000 in 2001.