Page 14 - Climate Control News November 2021
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                  In Focus
  AUSTRALIA BUCKS GLOBAL TRENDS
Despite challenging market conditions, Australia has achieved double digit growth in the high wall air conditioning market for the first half of 2021.
In its latest report on global market trends, UK consultancy BSRIA, said the high wall splits market benefited from high temperatures in some regions and from investment in residential homes, as people continue to work from home.
Data centres applications are also going strong, benefitting from online shopping and construction activities, tourism and public investments which are slowly recovering.
The report said that in the last 18 months, the global air conditioning market has been operating under challenging market conditions.
While this is largely due to the pandemic, other factors contributed to this environment including extreme weather events, partial and full lockdowns in different parts of the world as well as shortages and increased prices for raw materials and shipment delays.
“However, 2021 has to date been a year of recovery and growth as businesses and individuals have started adapting to the constantly changing circumstances,” the report said.
“In China, many dealers stocked up before raising prices, but on the other hand, the government’s restrictive measures against Covid-19 have restricted commercial activities.
“In the first half of 2021, the market performance of light commercial air conditioning such as ducted, cassette and high-power capacity floor standing units remained sluggish.
“In India, although sales in Q1 2021 were promising, the second wave of the pandemic came at the worst possible time for the splits market (mid-April) and lasted long enough to hit sales during the peak sales cycle.”
On the upside, the report said energy efficiency upgrades are scheduled for January 2022, but it is still not certain whether they will be postponed enabling some more time for local producers to adjust.
A global shortage in chips and semiconductors and a general lengthening of lead time for most components created bottlenecks in the supply chain. Mini VRF is currently preferred in a modular form, while sustainable and profitable sales growth is expected by all chiller manufacturers.
Supply chain saga continues
 HVAC CONTRACTORS ARE being advised to expect delays and price increases over the coming months as the supply chain is faced with a perfect storm of factors here and overseas.
Raw material cost increases, container availa- bility, shipping transit times, reduction in air freight, and demand from international markets are just some of the issues cited by manufactur- ers and suppliers who participated in a recent roundtable organised by the Air Conditioning Mechanical Contractors Association of Austral- ia (AMCA).
Lockdowns, labour supply issues, and stricter safety protocols are all contributing to produc- tion slowdowns in major supplier markets, in- cluding China, Europe, and North America.
Delays in intermediate goods—especially electrical componentry such as semiconductors and integrated circuit boards—have also con- tributed to the problem.
Some manufacturers are experiencing delays of six months or more.
But supply issues and cost pressures extend beyond the point of manufacture. The slow- down in aviation has significantly reduced air freight capacity, while the lack of shipping con- tainer capacity has impacted all industries re- sulting in a five-fold price increase since the be- ginning of the year alone.
ABOVE: Empty warehouses are becoming more common as manufacturers experience serious delays.
AMCA members claim brokers and logistics companies are no longer honouring longstand- ing commitments.
Even when container capacity can be secured, suppliers are seeing significant delays in transit times regardless of the country of origin or the shipping routes taken.
Congestion issues and transit times are being further compounded by the onset of skill shortages.
“A LACK OF SHIPPING CONTAINER CAPACITY HAS HIT ALL INDUSTRIES.”
For example, a shortage of dockworkers has led to delays in offloading from ships while skills are also in short supply within local warehouses and manufacturing facilities, ranging from me- chanical assembly workers to forklift drivers.
To counter supply issues, many companies are trying to carry more inventory while placing or- ders well in advance of normal timeframes.
Compounding matters further are sharp, dou- ble-digit increases in the prices for raw materials such as aluminium, copper, and stainless steel.
While price increases are problematic, several roundtable participants cited the speed and un- predictability of the changes as their biggest challenge.
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