Carrier Global, Lennox International, and Johnson Controls each posted fourth-quarter results showing a pronounced split between market segments. Commercial HVAC—driven by data center cooling, healthcare expansions, and deferred institutional projects finally breaking ground—delivered high-single-digit growth for all three. Meanwhile, residential equipment sales remained essentially flat year-over-year, with modest improvement in replacement activity offset by ongoing weakness in new home starts.

For contractors, this divergence explains what you're already seeing in your dispatch schedules. Light commercial service agreements and retrofit quotes are converting at a healthier rate than twelve months ago, particularly for rooftop unit replacements and VAV upgrades in the 3-20 ton range. The manufacturers have responded by increasing lead times on commercial equipment by 1-2 weeks in some product lines, while residential inventory—especially builder-grade 14-16 SEER2 systems—remains readily available through most distributors.

Pricing held relatively stable across both segments during Q4, with manufacturers resisting the urge to chase volume through discounts. Street pricing on residential split systems has compressed slightly as distributor incentives returned, but commercial equipment pricing remains firm. Lennox specifically noted that mix shift toward higher-efficiency commercial products helped maintain margins even as unit volumes grew modestly.

Here's what to do this week: if you're bidding commercial work for Q2-Q3 installation, confirm lead times directly with your rep before submitting proposals—standard 4-6 week quotes may no longer apply for packaged rooftop units above 10 tons. On the residential side, don't sit on aging 14 SEER2 inventory hoping for a spring price bump; manufacturers have made it clear they're prioritizing commercial production capacity. If you're carrying more than 45 days of resi stock, consider moving it at cost-plus-10% to free up cash for commercial parts inventory and VAV controls.

The earnings calls also revealed continued investment in refrigerant transition tooling, with all three companies expanding A2L manufacturing lines. That suggests 2025 pricing on R-454B and R-32 equipment will remain elevated as production scales up, but availability should improve significantly by summer compared to the spotty shipments contractors dealt with in late 2024.