SUMMARY: Considering sales across all power ranges, gen-set sales gathered some momentum in Q2 2017, up 1.8% compared to Q1 2017 levels. This increase follows Q1 2017 where overall dealer reported sales were down 5.5% relative to Q4 2016 levels.
Within specific power ranges and fuel types, dealers selling diesel gen-sets reported sales increases of 4% to 5% from 21 kW to 500 kW while diesel gen-sets less than 20 kW were flat to up 1%. Dealers selling gaseous gen-sets reported a mix of results with sets <10 kW flat for the quarter, 10 kW to 300 kW up 5% and gen-sets from 300 kW to 1000 kW were up 7% overall.
On a Year-on-Year basis, unit sales for Q2 2017 were up 2.8% when compared to sales levels in Q2 2016.
Gen-Set dealers and distributors reported inventory levels in Q2 2017 were up 3.5% from Q1 2017 levels. Considering Year-on-Year changes, inventory levels at the end of Q2 2017 were 11.5% higher than the end of Q2 2016.
Dealers and distributors were more optimistic towards gaseous fueled gen-sets for Q3 2017 with quarterly gains generally ranging from 4% to 8%. The exception was for gaseous fueled gen-sets in the 10 kW to 20 kW range with gains of 11% expected for the third quarter. Lower growth rates were anticipated during Q3 2017 for diesel fueled gen-sets with quarterly sales levels decreasing 3.5% for gen-sets <100 kW and flat growth in the 100 kW to 500 kW range. The one area for growth of diesels in Q3 2017 was the 500 kW to 1000 kW range expected to be up 8% for the quarter.
METHODOLOGY: Since 1998, Power Systems Research (PSR) has been continuously maintaining its PowerTrackerTM series of syndicated surveys, conducting 1,400 interviews each quarter among three key respondent groups in North America: gen-set dealers and distributors, businesses and households.
We conduct 200 interviews each quarter among dealers and distributors; the focus of this survey is on recent sales and market observations for the current quarter as well as expectations for the coming quarter.
Our Business Consumer survey consists of 900 interviews per quarter among a wide cross section of businesses to gather their input concerning ownership, usage trends and motivating factors for purchase, including any concerns about the reliability and availability of electric power.
Finally, our Household Consumer survey consists of 300 interviews per quarter to learn more about gen-set ownership trends among households and monitor the likelihood of a gen-set purchase.
Our latest results from the PowerTrackerTM dealer and distributor survey showed that overall sales of gen-sets during the second quarter of 2017 were up 1.8% relative to the first quarter of 2017.
Within specific power ranges and fuel types, dealers selling diesel gen-sets reported sales increases of 4% to 5% from 21 kW to 500 kW while diesel gen-sets less than 20 kW were flat to up 1%. Dealers selling gaseous gen-sets reported a mix of results with sets <10 kW flat for the quarter, 10 kW to 300 kW up 5% and gen-sets from 300 kW to 1000 kW were up 7% overall.
On a Year-on-Year basis, unit sales for Q2 2017 were up 2.8% when compared to sales levels in Q2 2016.
Gen-Set dealers and distributors reported inventory levels in Q2 2017 were up 3.5% from Q1 2017 levels. Considering Year-on-Year changes, inventory levels at the end of Q2 2017 were 11.5% higher than the end of Q2 2016.
Dealer/Distributor Outlook for Third Quarter 2017
When asked about the short-term outlook, PowerTrackerTM dealer and distributor respondents were more optimistic towards gaseous fueled gen-sets for Q3 2017 with quarterly gains generally ranging from 4% to 8%. The exception was for gaseous fueled gen-sets in the 10 kW to 20 kW range with gains of 11% expected for the third quarter. Lower growth rates were anticipated during Q3 2017 for diesel fueled gen-sets with quarterly sales levels decreasing 3.5% for gen-sets <100 kW and flat growth in the 100 kW to 500 kW range. The one area for growth of diesels in Q3 2017 was the 500 kW to 1000 kW range expected to be up 8% for the quarter.
When asked, “Why do you expect sales to change in the upcoming quarter?” comments from dealers focused on the following market observations:
- Weather / Seasonality: Dealer respondents most often mentioned they expect sales change in the third quarter due to either weather events or seasonality. Many dealers are preparing for potential third quarter sales increases from hurricanes and other seasonality influences associated with the typical sales year.
- Demand and activity levels: Considering all dealers’ comments there was a general level of agreement that gen-set demand and activity levels seemed relatively strong within their local markets. Overall the general sentiment reflected a total market that has some positive momentum to be carried into the third quarter.
When asked, “What changes have you recently noticed among particular customer groups or product categories within your market?” there were several comments that emerged as common themes:
- More requests for gaseous fuels: A number of dealers noted an increased level of interest from both residential and commercial end-users towards natural gas or propane fueled gen-sets.
- Several dealers noted a trend among residential users towards larger rated units. This may point to the fact that residential users have an increasing number of appliances and loads that they deem important enough to justify a larger investment into a standby generator for their home.
While overall sales levels year-to-year remain relatively stable, inventory levels are trending upward each quarter since early 2014. Dealers have still resisted pulling back on inventory buildup; yet again a continued sign that confidence exists in the near-term market prospects. PSR
Joe Zirnhelt is the Chief Operating Officer and Strategist with Power Systems Research (PSR), a market research and consulting company headquartered in St. Paul, MN. E-mail: info@powersys.com
