Declining Dollar Drives Up Prices
If you’ve been following the news lately, you’ve likely noticed that the Canadian dollar has been experiencing a dramatic decline. As I write this, the dollar is currently sitting at 0.91 cents American. That means that one U.S. dollar is worth $1.09 Canadian.
While the dollar has seen some resurgence throughout the year, experts are predicting that the Canadian dollar will fall a further 10-15% by the end of 2014. If they are right, one U.S. dollar could soon be worth as much as $1.25 Canadian.
This means that we will all be feeling the hit in our pocketbooks throughout 2014, especially when buying products imported from the U.S.
Unfortunately, the heating and cooling industry will be amoung those most affected. While furnace, air conditioner and boiler manufacturers typically have Canadian headquarters, the actual manufacturing of HVAC equipment takes place almost exclusively in the United States and is exported to us. These manufacturers have already been hurt by the depressed state of the U.S. housing sector, and have increased their prices in order to regain lost profitability.
Our suppliers have already announced 6-10% price increases and warned us that further hikes are on the way. Due to the combined impact of unfavourable exchange rates and a depressed housing sector, we are very concerned that the cost of equipment could rise as much as 20% this year.
We are working closely with our partners, including Goodman, York and Weil-McLain, to minimize the impact of these price increases on our customers as much as possible.
The Buck Stops Here
So far our best strategy has been to reorganize our warehouse and stock up on inventory before the price increases came into effect. While quantities last, we will not be raising our prices.
We will continue to do our best to stay ahead of the curve and find ways to keep our prices reasonable without compromising our service. However, I highly recommend that if any of your heating or cooling equipment is over 15 years old and needs to be replaced, now is the time to contact us.
If you have any questions, please call our office and we will be very happy to help you.