SIC 5075
WARM AIR HEATING AND AIR CONDITIONING EQUIPMENT AND SUPPLIES

This industry includes companies that wholesale warm air heating and air conditioning equipment and supplies. Industry products include air conditioning equipment (except room units), air pollution control equipment, electric heating furnaces, humidifiers and dehumidifiers (except portable units), and ventilating equipment.

NAICS Code(s)

421730 (Warm Air Heating and Air-Conditioning Equipment and Supplies Wholesalers)

According to the U.S Census Bureau, there were 5,579 establishments involved in the wholesale warm air and heating, and air conditioning equipment and supplies industry. The number of employees totaled 57,478, and the annual payroll was about $2.7 million. The combined industry totaled $15,371.40 million in 2003. The total number of establishments increased to 7,701, and the average sales per establishment totaled some $3.10 million. The industry is geographically distributed throughout the United States, with the Midwest, Southeast, and West having a slightly higher share than elsewhere of the industry"s establishments. The largest concentrations of facilities in this classification were in Texas, California, New York, Illinois, and Florida.

In 1997 the U.S. Census Bureau reported that there were 799 establishments manufacturing equipment for air conditioning, warm air heating, and commercial and industrial refrigeration. These operations shipped $22.9 billion worth of merchandise, spent $12.5 billion on materials, and invested $569 million in buildings and other structures, machinery, and equipment. About 63 percent of these establishments employed at least 20 people, and 33 percent employed at least 100 people.

In the early 2000s, growth was predicted for this industry from selling through nontraditional channels such as the Internet. Changing Environmental Protection Agency (EPA) regulations were also expected to increase sales, since the phasing out of older refrigerants would create a demand for replacement units. Supermarkets, restaurants, and high-rise buildings were among those converting to new refrigeration and air conditioning systems through the year 2000.

The U.S. Census Bureau estimated that the main product of 133 of these establishments was mechanically refrigerated, self-contained heat transfer equipment. These operations shipped $5.4 billion worth of merchandise and employed 29,110 people. Products in this category accounted for about 19 percent of total industry shipments in 1997. The largest value of shipments in this segment originated in New York, Georgia, Tennessee, Texas, and Kentucky. This industry employed 120,002 people, including 91,566 production workers who earned an average hourly wage of $12.65. Total payroll was $3.7 billion.

Unitary air-conditioners, not including air source heat pumps, were the main product at 55 facilities. These operations shipped $6.0 billion worth of merchandise and employed 24,194 people. Products in this category accounted for 20 percent of total industry shipments. The largest value of shipments in this segment originated in Pennsylvania, Texas, and Ohio. Room air conditioners and dehumidifiers, except portable units, accounted for four percent of shipments.

Warm air furnaces (including duct furnaces and humidifiers) and electric comfort heating equipment were the main products at 33 establishments. These operations shipped $1.7 billion worth of merchandise and employed 7,234 people. Products in this category accounted for nine percent of total industry shipments. The largest value of shipments in this segment originated in Tennessee and Ohio.

Air source heat pumps, not including room airconditioners, accounted for four percent of the industry's shipments; and ground and ground water source heat pumps accounted for less than one percent. Parts and

accessories for air-conditioning and heat transfer equipment accounted for nine percent. The largest value of shipments in this segment originated in Tennessee, New York, Missouri, and Ohio.

By 2002, warm air heating and air conditioning dominated more than 45 percent of the industry with $5.5 billion in sales. Heat transfer equipment had total sales of $4.3 billion, condensing units sales totaled $300 million, room air conditioners generated $881 million in sales, motor vehicle mechanical air conditioning systems accounted for sales of $2.1 million, compressors and compressor units sales totaled $2.22 million, automotive air conditioning compressors generated $1.6 million in sales, nonelectric warm furnaces and humidifiers contributed sales of $1.53 million, unitary air conditioners totaled $5 million in sales, and air source heat pumps had $1.07 million in sales.

Among companies whose primary products fell into this classification, ACR Group Inc. of Philadelphia, Pennsylvania, had 450 employees and sales of $155.5 million in 2002. Previously known as Time Energy Systems Inc., this firm manufactured various climate control products. Another company, Gensco Inc. of Houston, Texas, had 500 employees and estimated sales of $117 million. Gensco manufactured furnace duct pipe, elbows and fittings, and custom-cut flexible ducting.

Of other diversified companies that made products in this category, W.W. Grainger Inc. of Lake Forest, Illinois, was one of the largest with 14,701 employees and sales of $4.67 billion in 2003. The company's Grainger Division, a nationwide distributor of air compressors, air conditioning and refrigeration equipment and components, and other tools and equipment, served more than one million customers and had several hundred branches located nationwide.

Other industry leaders included Primus Inc. of Dayton, Ohio, with 3,195 employees and sales of $1.1 billion in 2003; and United Refrigeration Inc. of Philadelphia, Pennsylvania, with 1,175 employees and estimated sales of $384 million.

Further Reading

ACR Group Inc., 2004. Available from http://www.acrgroup.com .

D&B Sales & Marketing Solutions, 2003. Available from http://www.zapdata.com .

Gensco Inc., 2004. Available from http://www.gensco.com .

Hoover's Company Profiles. April 2004. Available from http://www.hoovers.com .

United Refrigeration Inc., 2004. Available from http://www.uri.com .

U.S. Census Bureau. Current Industrial Reports 2003. Available from http://www.census.gov/www/index.html .

U.S. Census Bureau. Statistics of U.S. Businesses 2001. Available from http://www.census.gov/epcd/susb/2001/US421420.HTM .

W.W. Grainger, Inc., 2004. Available from http://www.grainger.com .