< Previous10 MARCH 2022 HIGH-PERFORMANCE HVAC TODAY Purchasing Managers Index. Be sure to track your business’ performance against the macro economy. If necessary, adjust your expenditure plans. Inflation is a top-of-mind economic trend for 2022. The Federal Reserve is beginning to pull back its monetary stimulus, and leading indica- tors simultaneously move lower. This suggests inflation will be more modest than in 2021. In- flation rates will cool in 2022 and into late 2023 due to multiple factors, including easing demand during the upcoming macroeconomic slowing growth trend. Lingering supply chain issues will keep inflation elevated in the near term, particu- larly in the first half of 2022. In addition to dealing with inflation, consumers are also contending with a less robust U.S. Personal Dispos- able Income (PDI) trend. We expect DPI to normalize along the lines of the pre-COVID trajectory in the next sever- al months. So, we expect the consumer position to be less strong in 2022 than in 2021. A weakened consumer posi- tion will likely result in more price con- sciousness this year, contributing to the anticipated slowing growth trend in U.S. Total Retail Sales. We expect Retail Sales to generally rise into 2023, in real and nominal dollars, de- spite business cycle decline. However, firms should keep a close eye on inventory turns during the backside of the business cycle, as inflation can easily mask real growth issues if you are not closely watching unit levels. Now is the time to be meticulous in under- standing your business’s relationship with the various sectors of the macro economy. The T he U.S. industrial sector is on the cusp of transitioning to a slowing growth trend. Our analysis, which includes examin- ing several leading indicators, provides strong evidence that growth rates will be lower in 2022 than in 2021. U.S. ECONOMY Despite this slowdown, we do not expect con- traction during this cycle. U.S. Industrial Pro- duction will rise through the next year, just at a less robust rate than in 2021. As such, we are entering a dangerous part of the business cycle. This cycle is the crucial period during which firms will likely feel the energy of overall growth but may miss the signs of waning momentum. Those who ignore the signals emanating from leading indicators may fall into the trap of straight-line budgeting or over-expanding ca- pacity. These signals include the ITR Leading In- dicator™ – our proprietary indicator that leads U.S. Industrial Production through the business cycle by about three quarters – and the U.S. ISM Residential Construction: Slowing Growth Beckons By Jackie Greene MANAGEMENTMARCH 2022 11HVACTODAY.COM Mortgage rates are another im- portant factor for home buyers. Rates depend on many factors, including the Federal Reserve’s monetary policy, inflation, and bond market conditions. The recent rise in long-term rates, combined with inflationary pressures taking a bite out of consumer purchas- ing power, will contribute to less-ro- bust growth rates for the housing sec- tor in 2022 than in 2021. However, less-robust growth is still growth. Despite the recent rise, mort- gage rates are still low relative to his- torical norms, and consumers have savings they can tap. Furthermore, the strong jobs market will enable con- sumers to purchase homes. Use this time of slowing growth to prepare your business for subsequent years. Improve corporate governance, create hiring and retention plans, and make capital investments. U.S. REFRIGERATION AND HVAC EQUIPMENT Be careful when looking at New Orders and actual Production for U.S. Refrigeration and HVAC Equipment – the trends are not as aligned as you might think. Annu- al new orders totaled $52.1 billion in November, up 13.7% from last year. Overall production for 2021 was up 13.8% from the 2020 average, seem- ingly in line with new orders. Expect annual new HVAC equip- ment orders to rise through 2022 generally but will grow at a slowing rate throughout the year. In contrast, annual new equipment production will rise into the middle of this year before declining into 2023. Softening demand in the U.S. housing sector is ap- plying some downward mo- mentum to both new or- ders and production, but there are three main factors for the differences that you should be aware of. zPricing z Supply Chain Woes zMultiple Orders. Pricing – New Orders are based on the pricing of units ordered, while Production is based on the number of units actually made. Because higher costs are passed onto the consumer, we see a rise in new order dollar backside of the business cycle can af- ford you the time to adjust. With to- day’s relatively low interest rates, it is still a good time to invest in your busi- ness, particularly given the growth ex- pected throughout much of the macro economy during the next three years. Implement improvements and effi- ciencies in 2022 and 2023 while ac- tivity is slower than in recent quarters. RESIDENTIAL CONSTRUCTION U.S. Single-Unit Housing Starts totaled 1.123 million units for 2021, coming in 13.4% above the 2020 level. Last year was the highest-volume year for housing starts since 2006. Even so, the 2021 to- tal includes some late-in- the-year stagnation, with the 12-month moving total dropping about 1.5% from the August level by year- end. We expect the rise to resume in the near term and persist until at least 2024. However, the pace of rising will be slower this year than in 2021. U.S. Home Prices continue to climb, backed by a strong consum- er, low mortgage rates, and limited inventory. However, the pace of rise for quarterly home prices has ticked down. Nascent business cycle de- cline in home prices is in line with the overall slowing growth trend in housing starts. 12 MARCH 2022 HIGH-PERFORMANCE HVAC TODAY MANAGEMENT Refrigeration and HVAC Equipment Production in the latter half of 2022 into 2023 will be relatively mild and will not erode all of the gains made in 2021. Lead with confidence. Your teams may become nervous as they see the news. Share the leading indicators and our forecasts with them so they too can feel confident. know how you align with the trends. Is your business more in alignment with New Orders or Production? How does your business relate to the macro and regional housing environment? Secondly, ensure your suppliers are well-positioned for 2022. While cus- tomers are now accustomed to lon- ger-than-normal delivery times, being speedy will help win business. Thirdly, ensure you have strong can- cellation clauses in place. You do not want to build out capacity for orders that may be canceled on you. Lastly, while we see the housing market and U.S. Refrigeration and HVAC Equipment on the backside of the business cycle in 2022, it is essen- tial to remember that the overall out- look is strong. Even the decline in U.S. amounts. Production does not directly benefit from the higher prices. Supply Chain Woes – New Or- ders can be placed, but sluggish activ- ity in the supply chain can hinder the production process. While we expect supply chain constraints to lessen as we progress through the year, this re- mains an ongoing risk to the produc- tion process. Multiple Orders – With custom- ers concerned about long delivery times and inventory in general, some are placing multiple orders and then canceling any not-yet-delivered prod- ucts. This can result in inflated order numbers relative to the desired num- ber of units. There are steps you can take to po- sition yourself better for 2022. First, Jackie Greene is Vice President of Economics and has served ITR Economics’ (hubs.la/ Q011t5WX0) clients since 2005. She has contributed to the com- pany’s forecasts, pub- lications, and thought leadership. Jackie works with many clients in a one-on-one capacity and delivered keynote addresses on multiple continents.MARCH 2022 13HVACTODAY.COM This was the responsibility of the gas company and quite a nuisance. The solution was the invention of the downdraft diverter. Before down-draft diverters, the only devices used in flues were single-acting barometrics de- signed for wood, coal, and oil-fired equipment. These were used to regulate draft and help con- trol combustion. However, these barometrics were not effective on gas equipment with stand- ing pilots because they did not relieve downdrafts. Dou- ble-acting gas barometrics were not yet invented. All original down-draft di- verters were round or mush- room type. A deflector plate was cen- tered inside the down-draft diverter that re-directed flue down drafts into the room rather than into the equip- ment. This would also send all the combustion gases into the room if the burners were operating. That was considered less of a nuisance. Before going forward, I think the theory be- hind atmospheric venting could use some better explanation. ATMOSPHERIC VENTING THEORY IS OFTEN MISUNDERSTOOD From many articles I read and some wonderful videos viewed on YouTube, the common thread seems to be that atmospheric equipment relies on positive buoyancy. Positive buoyancy is the principle of a dense material displacing a less W hen were draft diverters invented, and why? How are the functions of a draft diverter explained? Are some draft diverters today used as intended, or have they been modified from their original design? Do draft diverters perform as intended? If they do, would this be considered a safe operation? Most answers to these ques- tions are based on misconceptions. They’re rarely answered correctly. The original design of draft diverters, once called “down- draft diverters,” was to keep the flue from connecting to vented equipment. The ear- ly products most likely ap- peared in the late 1930s or early 1940s after a surge in demand for natural gas equip- ment with standing pilots. By the way, during those days, gas processed from coal was also listed as natural gas. SOME HISTORY One of the first patents list- ed for downdraft diverters was for Rheem ® water heaters in the 1940s. Though furnaces were not mass-produced until 1937 (by the Richardson & Boynton Co.), there were many gas water heaters, boilers, and ovens at the time. Down-draft diverters were invented to minimize pilots from blowing out on gas-fired equipment under windy conditions. Baltimore Automatic Shut Off (BASO) created the gas safety shut-off in 1934, but early gas safeties only turned off the main gas, not the pilot gas. So if the pilot went out, it was important to re-light it as soon as possible. History and Misconceptions of Draft Diverters and Draft Hoods By Jim Davis TECHNICAL All original down-draft diverters were either round or mushroom-shaped.14 MARCH 2022HIGH-PERFORMANCE HVAC TODAY aware that a certain height or a mini- mum vertical rise is necessary to allow enough dense air to displace hot gas- es? Were they also aware that internal building conditions could affect this? LAB CONDITIONS DON’T EQUATE TO FIELD CONDITIONS In the original installation instruc- tions of mushroom down-draft divert- ers, it says to mount them at a mini- mum height on top of the equipment. This was usually 12 in., but could be less if the heat exchanger was tall- er. After installing the diverter, a tech performed a smoke test, and if the smoke did not pull in freely, the diverter needed to be raised another 12 in. Much like today, this only sim- ulates one set of conditions and -- as we learn in the NCI Com- bustion Analysis and CO Safe- ty class -- this does not verify venting, only a venting action. Nonetheless, this was at least something to address existing environmental conditions back in the day. Then manufacturers faced a new problem -- a construction trend to lower the ceiling height in mechanical rooms. Equipment was now too tall to be installed with the movable mushroom downdraft diverter. Was it possible to build the draft- hood into the equipment and short- en its height? Along came the attached or built-in drafthood of the 1950s and 1960s. Could these draft diverters be adjusted to overcome equipment pres- sure drop and internal building con- ditions? Like so much HVAC equip- ment, they were tested and certified in dense material and causing it to float or move in an up- ward motion. If you lay on your back in a swimming pool and float, that is considered positive buoyancy, but it is deemed negative buoyancy if you sink. In this case, we are talking about the den- sity of combustion gases versus the surrounding air temperature. Atmospheric pressure and humidity also come into play. This would be logical if the equip- ment were installed outdoors and only influenced by outdoor conditions. Some examples of natural buoyancy and atmospheric pressure are camp- fires and forest fires, and that doesn’t always work when the wind blows. I have read many times that when you heat something, its molecules move faster and rise. Could that be why there are lids on barbecue grills, so our food doesn’t float away? The science says that heated items may expand, but they still must be less dense than their surroundings to rise. Natural buoyancy might be pre- dictable if something is only affect- ed by one set of conditions. However, when installing equipment indoors, it is subject to two pressure zones, out- door atmospheric pressure and the in- door stack effect of the building and/ or building leakage. Then there is the resistance or pressure drop of heat exchangers, boiler sections, or baf- fles in water heaters. For hot combus- tion gases to rise up and out requires enough denser air to displace them and overcome this resistance. Could it be that our forefathers were Draft tests taken from sample hole in vent Combustion tests taken upstream from draft diverter Typical Boiler Draft Diverter MARCH 2022 15HVACTODAY.COM TECHNICAL operating equipment was minimal. But, having proper safety switches might create a bigger nuisance because the equipment would fail more often than when pilots blew out or would keep tripping the safety switches. For over 40 years, I have experienced the dangers of draft diverters and draft- hoods. In 1993, a field test with AGA Labs verified the poor performance of draft diverters and drafthoods. In their report, AGA stated that re- moving or blocking draft diverters or drafthoods and replacing them with double-acting barometrics improved the safety and operation of all equip- ment tested. Eighteen out of eighteen had tested unsafe! Any time you see rust, white powder, or melted grommets anywhere on the equipment or flue, there is a potential hazard waiting to happen. Finally, as if the above isn’t enough, there are two things that must always be avoided: z Never install any venting fan above a drafthood! z Never use a horizontal drafthood fabricated by a sheet metal company! NCI is the only training organiza- tion that addresses the above with real world experience. We believe it is our responsibility to keep customers safe! And then they will live happily ever after!!! flue. But they all have blocked flue switches, right? At NCI we teach how to correct this problem, yet, in an arti- cle I wrote many years ago, I was con- demned for tampering with equip- ment to make it safer. Does a blocked flue switch determine if something is venting or not? The an- swer is no because it can be spilling out from the burners, especially during high draft conditions. ANY TIME YOU SEE RUST, WHITE POWDER, OR MELTED GROMMETS ANY- WHERE ON THE EQUIPMENT OR FLUE, THERE IS A POTENTIAL HAZARD WAITING TO HAPPEN. TESTING DRAFT DIVERTERS Testing a downdraft diverter or draft- hood for spillage or proper venting has different industry recommendations. Some are based on misconceptions. From the beginning, the common prac- tice was to use some kind of smoke and watch it pull into the draft diverter. Until 1999, the National Fuel Gas Code recommended using a cigarette, cigar, pipe, or match for this test. Now they recommend using a match, can- dle, or passive smoke. Then there is the standard draft test with a draft gauge. Unfortunately none of these verify venting. In the beginning, the downdraft di- verter made some sense. Because they were moveable, they could be adapt- ed to existing conditions. If every piece of equipment with these draft divert- ers had adequate spill and flame roll- out switches, the possibility of unsafely labs under ideal conditions that rarely occur in the field. For example, drafthood equipment tested in a lab with controlled ventila- tion keeps the room neutral or slight- ly positive. They test it with five feet of vertical pipe and two elbows. I am not aware of those conditions existing in the field. That brings us to a problem that everyone ignores. Engineering data or specifications on drafthoods or downdraft divert- ers state they work safely with 40% to 50% dilution air. Does that imply draft- hoods work unsafely at different dilu- tion rates? It’s like telling a skydiver to pull their ripcord at least 300 feet above the ground. No mention of what happens if you don’t, but odds are you won’t re- peat this mistake more than once! With no adjustable control, how will dilution air be maintained? When looking at NCI’s Combustion Diagnos- tic Charts, we see that the design draft for all drafthood equipment is -.01” to -.02” w.c., as measured in the flue above it. This is the approximate draft where 40% to 50% dilution air occurs, or at least in lab tests. For those who mea- sure, draft can be much higher. If dilution air is 50% in the flue, then flue gases should be 50% as well, which means the flue would be sized for the quantity of both. Looking at industry venting tables you will notice equip- ment without drafthoods have a small- er flue size. WHAT ABOUT A BLOCKED OR RESTRICTED FLUE? One of the biggest problems with a drafthood is it allows equipment to operate with a restricted or blocked Jim Davis is the senior instructor for National Comfort Institute (NCI). He has a long and storied career in the HVAC Industry. Today he is considered one of the foremost authorities on airflow’s impact on combustion and carbon monoxide safety. If you have questions. you can contact him, at ncilink.com/ContactMe.To take the survey, click ncilink.com/ SummitSurvey and get started today. Find out more about Summit 2022 here ( gotosummit.com ). And if you haven’t al- ready done so, register here: ncilink.com/ summitreg. Welcome New NCI Members Membership in NCI is a step toward becoming a High-Performance HVAC Contracting firm. It is a commitment that has an extraordinary impact on your business and your team. So, it is our pleasure to recognize and welcome those new members who joined our ranks since January 1, 2022: z Comfort Monster Heating and Air, Raleigh, NC z Greg Steger Heating & Air, Plymouth, WI z Greiner HVAC, Dixon, CA z Picture Rocks Cooling, Heating, and Plumbing, Tuscon, AZ z Thermo Direct, Raleigh, NC z Volpe Service Co., East Hanover, NJ. We are pleased you all opted to join our family and look forward to hearing from you. Please look for regular mem- ber benefit updates here and on our website. NCI’s Online University NCI membership gives you access to the Online University: an online training approach that allows you and your team to do training at your own pace and on your schedule. Our Online University is organized into “logical learning steps.” These steps begin with: z Advanced Technical Training z Business Management Training z Customer Service Training. Within the Advanced Technical Training category: NCI Fundamentals 101 has nine courses to help your team understand airflow basics, fan laws, and more. It also includes an introduction to Carbon Monoxide. NCI Fundamentals 201 has nine cours- es to take your field people to the next level after mastering the 101 series. From how to take duct traverses to basic build- ing pressure, and so much more. System Performance Testing fea- tures eight courses covering the funda- mentals of HVAC system performance and measured Btus. Members get a 10% discount on all classes, while those with the Learning Excellence Premium and Learning Ex- cellence Online subscriptions get the entire Online University included. The Online University Business Man- agement Training has a similar organi- zation. There are 101, 201, and 301 levels plus a four-module Path to Performance with NCI’s 4-D Business Model course. Online University also offers Business Performance 101 and 201 Training. Our Customer Service Training in- cludes the following courses: z Customer Service Excellence z Proactive Customer Service 101 z Proactive Customer Service 201 z HVACR for Rookies. Learn more at ncilink.com/NCI Membership . HVAC Summit 2022 Is Nearly Here With slightly more than a month until the 2022 High-Performance HVAC Summit kicks off (March 27 to 31) at the We-Ko-Pa Casino and Resort in Scotts- dale, Arizona, it’s time to put your plan together. Here is a preview of two of the 18 break- out sessions from which you can choose. How to Create Custom Air Upgrades – Make Air Upgrades the Center of Your High-Performance Strategy . David Rich- ardson will show you how to assemble customized air upgrade kits based on the installation conditions you see most in the field in this Practitioner-level class. Two Must-Do Combustion Safety Tests to Help Keep Your Customers Safe. Contractor Tom Johnson teaches the ba- sics of measuring ambient carbon mon- oxide (CO) and discussing the sources and causes of CO and combustion issues inside a building. This CO class fits into our novice-level category. With18 total classes, you may need help deciding who to send to what session. We can help you with that. Nation- al Comfort Institute (NCI) created a brief survey you can take that will enable us to build a personalized schedule for you and your team! BONUS : by taking this survey, each employee will receive a unique code that is good for $100 off their registra- tion fee. NCI UPDATE 16 MARCH 2022HIGH-PERFORMANCE HVAC TODAYMARCH 2022 17HVACTODAY.COM HVAC SMART MART18 MARCH 2022HIGH-PERFORMANCE HVAC TODAY potential candidates the sexy side of HVAC, and how they can build a lifetime career that is both financially and professionally rewarding. These new technologies are available today, not five years from now. It is up to serious contractors to make them part of their company culture. This will make it easy to share the vision and mission with people considering an HVAC career. RETAINING OUR EXISTING BASE One of the keys to keep us from losing roughly 100,000 technicians in the next five years is to find ways to stop them from wanting to leave. Some will just age out, of course, so we also must focus on bringing new talent into the industry. The three keys to retaining good people are providing a real career path, paying them well, and continuously training them. We also must have the flexibility to provide a better work/life balance. This is a common desire, espe- cially among younger generations. This flexibility will require different thinking in terms of scheduling while still being able to respond to customer needs. It will be easier for mid-size to larger companies as they have a big- ger pool to pull from to cover for more flexible work schedules. Smaller companies will have to be more creative to maintain flexibility. CREATE REAL CAREER PATHS How do you create and communicate that you are an attractive option to existing and potential employees? First take at look at the existing positions in your company. Take some time to illustrate each position, both in words and visually. Continue reading this article online by clicking ncilink.com/0322OMT2. O ur industry needs roughly 400,000 technicians and installers to operate at normal capacity. This number has been fairly consistent for more than 30 years. According to the Bureau of Labor Sta- tistics, the HVAC industry is short one in four technicians. In other words, we’re only employ- ing roughly 300,000. If we don’t do something meaningful soon, one out of two HVAC field positions will remain un- filled by 2027. That’s 200,000 out of 400,000 unfilled positions! Just think about the damage that could do to our industry, not to mention the impact on con- sumers. So what can we do about it? A DIFFERENT MESSAGE If we are to attract good talent to our industry, we must paint a very different picture than that of a technician or installer sweating it out twisting wrenches and pounding metal. We need to provide a vibrant image of diag- nosticians who use sophisticated instruments and software to diagnose and solve problems. We must show potential installers how they won’t just be laborers in the trade, rather craftsmen who understand how systems really work. We must demonstrate how they are responsible for properly servicing and installing equipment, and improving air distribution systems with mea- sured, proven results. We have to be able to show ONE MORE THING... By Dom Guarino WE HAVE TO BE ABLE TO SHOW THE SEXY SIDE OF HVAC, AND HOW TECHNICIANS CAN BUILD A LIFETIME CAREER THAT IS BOTH FINANCIALLY AND PROFESSIONALLY REWARDING. Technician Shortage: Our Industry’s #1 Challenge Dominick Guarino is publisher of High-Performance HVAC Today magazine and CEO of National Comfort Institute, Inc. He can be reached at ncilink.com/ ContactMe . Advertiser Index AD INDEX To Subscribe to High-Performance HVAC Today: ONLINE: Visit HVACToday.com/subscribe for a FREE digital subscription. PRINT: 1 year/$72; single copy $7. Canada: 1 year/$92; single copy $9. Payable in advance with U.S. funds. Prepaid subscriptions may be sent to: High-Performance HVAC Today, PO Box 147, Avon Lake, OH 44012. Phone: 440-949-1850; toll free 800-633-7058; or visit HVACToday.com/subscribe to order online. Arzel Zoning Technology, Inc. | www.ArzelZoning.com .................................................... 17 Baker Distributing Company | www.BakerDist.com ........................................................... 19 Duct Saddles | www.DuctSaddles.com ..................................................................................... 12 Goodman Manufacturing | www.GoodmanMfg.com ........................................................ 2 Lazco Corp. | www.LazcoCorp.com .............................................................................................. 9 R.E. Michel Company | www.REMichel.com ............................................................................ 5 The New Flat Rate | www.TheNewFlatRate.com ................................................................ 17 To Your Success | www.ToYourSuccess.com .......................................................................... 17 HIGH-PERFORMANCE HVAC TODAY TM Publisher Dominick Guarino Editor-in-Chief and Associate Publisher Mike Weil Art Director Judy Marquardt Online Development Director Brian Roseman Circulation Manager Andrea Begany-Garsed Go to ncilink.com/ContactMe with your comments and questions. MARCH 2022 19HVACTODAY.COMNext >