Carrier is sounding considerably more confident about the U.S. HVAC market than it was at the start of the year.

Speaking at Morgan Stanley’s Laguna Conference this week, Carrier CEO David Gitlin said the company’s residential and light-commercial businesses in the Americas are both expected to grow at a high-single-digit rate this year. 

That is substantially better than Carrier initially expected.

But stronger demand is arriving alongside another issue contractors and distributors will care about:

More price increases may be coming.

U.S. HVAC Shipments Are Holding Up Better Than Expected

Gitlin said industry shipments totaled approximately 9.2 million units in 2024 before falling to 7.5 million in 2025.

Carrier had expected 2026 industry shipments to land somewhere around 6.5 million to 7 million units.

Instead, Gitlin now expects the market to finish around 7.5 million again. 

That is a meaningful change in outlook.

The replacement market has remained under affordability pressure, but the collapse manufacturers feared has not materialized.

Carrier Is Preparing Another Major Factory

Carrier is also planning additional U.S. production capacity.

Gitlin said the company expects to announce the location of a new factory in either Texas or Alabama within the next several weeks.

According to the CEO, the new facility will double Carrier’s existing capacity in the relevant product category. 

Carrier did not disclose the final location during the conference.

Price Increases Are Still on the Table

The bigger near-term contractor issue may be pricing.

Carrier says input costs have risen more than expected because of tariffs and higher costs for:

Copper.

Steel.

Aluminum.

Fuel.

The company has already been pushing pricing through the market.

And Gitlin said Carrier may need to consider additional out-of-cycle price announcements. 

He was also clear that the company does not expect a repeat of 2022, when manufacturers could push very large increases repeatedly.

But the direction remains upward.

Why Distributors Should Pay Attention

For distributors, stronger-than-expected volume is good news.

Another manufacturer increase is more complicated.

Inventory purchased before an increase can temporarily create margin opportunity.

Inventory purchased afterward raises replacement cost.

That makes timing, stock levels and contractor communication increasingly important.

Contractor Takeaway

Carrier's message is essentially two stories at once.

Demand is healthier than the industry feared.

Costs are still climbing.

Contractors may therefore enter 2027 with a more stable equipment market — but not necessarily a cheaper one.