Forecasting future demand for your business can be an ongoing struggle as it requires analysis of past sales data and monitoring of market trends. In terms of market trends, building permits and housing starts are key leading indicators of future demand in the HVAC industry.

The value of Canadian building permits unexpectedly soared in December 2011, as $6.8 billion were issued. (discussed in a previous blog post). The 11.1 percent m/m increase was powered by plans for new condos and apartments in Ontario and commercial buildings in Alberta. In the residential sector, the value of permits rose 16.1 percent to C$4.5 billion, led by Ontario. Non-residential permits rose 2.8 percent to C$2.4 billion, with construction of office buildings and warehouses in Alberta.

As industrial professionals know, HVAC installations are required when constructing a building, meaning that all construction sites should be seen as an opportunity for business. With high production of buildings in the near future, HVAC industry should expect increased business activity as installations gain higher demand.

Looking through the data, apartment and condo planning emerged in Eastern Canada while Western provinces consisted more of non-residential construction. This shows that there is an increasing level of Eastern Canadians moving to urban centers. Settling in urban areas could be a result of the price of oil being higher than the cost of living, making workers less likely to drive to work, forcing them to live closer to the city. Positively, development in urban residential areas brings increasing HVAC business activity, seeing that apartments require more ductwork that commercial buildings.

In conclusion, Eastern Canada may experience substantial amount of business this year, while the Western provinces will encounter less, but overall promising news for a strong future demand in the Canadian HVAC industry.


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