The word everyone keeps using for 2026 is stabilization. After residential cooling shipments fell more than 25% year over year through much of 2025, sometimes nearly 50%, manufacturers are calling the bottom and projecting modest recovery in the second half of the year.
Carrier CEO Dave Gitlin put it plainly: the US market exited 2025 well below its typical replacement pace and a return to normal won't happen in a single year. Trane Technologies is projecting a slow first half followed by a recovery. Rheem is penciling in low single-digit growth for the full year. Nobody is popping champagne.
The structural pressures are still there. Labor shortages are getting worse, not better. Material costs remain elevated. Tight lending is keeping homeowners from pulling the trigger on replacements. And the refrigerant transition to 454B added friction across the whole supply chain in 2025.
The bright spots are real: commercial is holding up, data center demand is strong, and heat pump volumes are growing. But for the contractor running a residential-heavy book of business, 2026 is a grind year. Manage your pipeline carefully, watch your margins, and don't count on volume to bail you out.
