Sales growth at U.S. HVACR distributors slowed in 2025 as underlying unit demand declined, capping what industry leaders described as a challenging year shaped by softer fundamentals and difficult comparisons, according to new data released Feb. 13 by the Heating, Air-conditioning & Refrigeration Distributors International.
Full-year sales for 2025 increased 2.85%, based on monthly data submitted by participating distributor members through HARDI’s Trends program. After adjusting for billing-day differences and price increases, unit demand declined modestly for the year, the association said.
“December capped off a challenging year for HVACR distributors,” said Brian Loftus, who leads market intelligence at HARDI and oversees the monthly Trends analysis.
The data is compiled by an independent third party and reflects voluntary participation from distributor members. HARDI said members do not receive financial compensation for submitting sales figures and may discontinue participation at any time.
The 2.85% annual sales increase reflects revenue growth rather than volume expansion. HARDI said price increases and billing-day variations accounted for much of the reported gain, while unit shipments weakened modestly against tough year-over-year comparisons.
The slowdown follows several years of stronger post-pandemic growth driven by elevated housing activity, supply chain disruptions, and inflation-related price increases.
Outlook Supported by Refrigerant Transition, Housing Trends
HARDI said the outlook for 2026 appears more favorable, citing easier year-over-year comparisons, pricing tied to the transition to A2L refrigerants and signs of improvement in housing-related demand.
The industry is adopting A2L refrigerants, lower global warming-potential alternatives required under federal environmental regulations. The transition is expected to raise equipment costs, contributing to higher average selling prices across parts of the HVAC market.
Improvement in residential construction and replacement demand would also support distributor performance, as HVAC equipment sales are closely tied to housing starts and renovation activity.
Loftus, whose analysis incorporates HARDI data along with broader economic indicators, said the numbers underscore the value of participation in the association’s reporting program.
“There’s value in the numbers, and more value if you participate,” Loftus said in the report.
The 2025 deceleration marks a period of normalization following unusually strong pandemic-era demand. As interest rates remained elevated and comparisons became more difficult, sales growth slowed and volume trends softened.
Still, distributors enter 2026 with expectations for improved performance as pricing dynamics shift and housing conditions stabilize.
HARDI’s Trends report is widely used within the wholesale HVAC distribution sector as a barometer of market activity, though participation levels vary by region and reported figures may include products not directly associated with HVACR, the association said.
