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HVAC Contractors Need to Adapt to Repair Market

Repair or replace is a question homeowners often need to answer, and it greatly impacts an HVAC contractor's business. During COVID, the residential HVAC industry saw a replacement market boom. But in 2023 and now the beginning of 2024, there has been a shift to a repair market that HVAC contractors need to be aware of as they run their businesses.

According to numbers from the Air-Conditioning, Heating and Refrigeration Institute (AHRI), shipments of unitary air conditioners and heat pumps were down 16.7% in 2023, compared to 2022. Gas furnaces were down 23%.

"The replacement market is performing worse when you strip out new construction," said industry leader Matt Michel. "Housing starts were down around 5%, according to the St. Louis Federal Reserve, so the replacement market for unitary air conditioners and heat pumps was down in the low 20s."

Distributors are seeing similar numbers, according to the Heating, Air-conditioning, & Refrigeration Distributors International (HARDI).

"We definitely are seeing a shift here. And that shift has actually been visible for some time," said Tim Fisher, HARDI director of market intelligence.

HARDI receives data from FieldEdge on the invoice and quote trends exhibited by their users. Invoices reflect work that has been completed, whereas quotes reflect potential future work and are most often provided for new system installations. HARDI has found that, over time, the ratio of new invoices to new quotes is a useful indicator of whether a market is trending more toward repair than replace and vice versa.

The numbers show the annual growth rate bottomed out in the spring of 2022 but remained negative through most of the year, indicating that replacement trends were broadly higher in 2022 than in 2021. That figure increased through 2023, peaking in May but generally remaining positive for most of the year. While the three-month growth rate has slowed in recent months — an encouraging sign — they don't expect much of a negative drift in 2024, meaning that repair versus replace trends will broadly remain similar to where they were in 2023.

So why is this change happening? It can't be attributed to any single factor but rather a combination of items. Certainly, higher costs of both HVAC systems and housing in general play a role.

"Adapting to the economy is something contractors need to do. We can't just assume people are going to reach into their pocket and replace," said ACCA CEO Bart James. "Contractors need to help customers get through the current need. People are slowing down on theirspending. People are worried about what is coming and how they are preparing for it. Wages and other things are not keeping up with how fast prices are going up."

James said reading the numbers shows there is a shift in the home improvement market.

"Just look at the Walmart and Home Depot quarterly projections. Walmart did well with more visits but had smaller purchases, while Home Depot did not hit their numbers. That tells you that people are handling investments into housing differently. That will catch up with HVAC, too. "Contractors need to prepare by making investments in their team to meet the needs of the customer. And that need is not always a replacement option but also can be a repair option," James continued.

The sluggish home resale market is another reason for the shift towards a repair market. "Home improvement spending, in aggregate, tends to follow existing home sales totals nationally," Fisher said. "People invest more in their homes prior to selling to boost its value, and new homeowners spend more in their first year of moving than homeowners who stay put. This has major implications for HVAC replacement demand, which, historically, peaks when existing home sales are at their highest and falls off when existing home sales decline.

"Both the 3-month and 12-month growth rates bottomed out earlier in 2023, and while still negative, have slowed significantly," he continued. "We believe that home sale totals are at or nearing their trough, and over the duration of 2024 should steadily improve and finish at or ahead of 2023 totals."

The final reason is the cyclical nature of HVAC. It reflects the shipment cliff from 15 years ago, when the industry contracted 40% after peak shipments in 2005. Contractors cannot replace what was never installed.

How do HVAC contractors deal with this shift? Michel believes they should embrace the repair market.

"The money is better in replacements," he said. "It always has been and always will be. However, margins are better in service. For the next couple of years, anyway, contractors should focus on building up their service business and making money on it."

Since service involves more labor, and labor carries more overhead than equipment and material, keeping a close watch on overhead expenses is a must.

"Contractors need to build the service base, watch your marketing expenses drop, and down the road, the replacement margins and close rates to a satisfied service base will rise," Michel said. "Once we get past the shipment cliff, the replacement market will begin a decade-long run with every year being better than the year before it. We know this because it's what happened in the past, and when it comes to replacements, the past truly is a prologue."

Contractors in most parts of the country are already feeling the pinch of a slower market, and their experiences in 2024 are unlikely to be much different from their experiences in 2023 though rebounds from themilder temperatures we saw during peak months last year would go a long way in improving demand in 2024.

HARDI advises contractors should consider the following six tactics in '24:

• 
  
• •Offer financing options: Any homeowner considering a new system is likely going to feel some sticker shock if it's been a few years since they
• last bought a system. Financing a new system helps to alleviate that shock, making the big sticker prices much more palatable monthly payments.
• •Protect margins: Work to ensure that your pricing for jobs is consistent with market trends, and attempt to pass through as much of the higher system costs as possible. Likewise, now is a critical time to manage operating expenses closely. Together, good cost  management and smart pricing can help protect business margins in 2024.
• •Educate homeowners: Many homeowners may not fully understand the long-term benefits of replacing their HVAC system versus frequent repairs. Offer educational materials, such as blog posts, videos, or pamphlets, explaining the advantages of a new system 
• in terms of energy efficiency, lower maintenance costs, and improved IAQ. Also, be sure to make clear to your customers which incentives they may qualify for through IRA or other state-level rebate/incentive programs. 
• •Focus on value proposition: Emphasize the value proposition of a new HVAC system, highlighting its reliability, longevity, and performance. Help homeowners understand that investing in a replacement now can save  them money and hassle in the long run.
• •Offer maintenance packages: Create maintenance packages that bundle regular servicing with discounts on repairs or replacements. This can encourage homeowners to invest in preventive maintenance and build a long-term relationship with your company. 
• •Diversify services: Explore diversifying your services beyond just HVAC installations and repairs. For example, you could offer IAQ assessments, smart thermostat installations, or energy audits to provide additional value to homeowners and generate new revenue streams.

https://www.achrnews.com/articles/154324-hvac-contractors-need-to-ad apt-to-repair-market

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Chatbots could be used to steal data, says cybersecurity agency

The UK’s cybersecurity agency has warned that there is an increasing risk that chatbots could be manipulated by hackers.

The National Cyber Security Centre (NCSC) has said that individuals could manipulate the prompts of chatbots, which run on artificial intelligence by creating a language model and give answers to questions by users, through “prompt injection” attacks that would make them behave in an unintended manner.

The point of a chatbot is to mimic human-like conversations, which it has been trained to do through scraping large amounts of data. Commonly used in online banking or online shopping, chatbots are generally designed to handle simple requests.

Large language models, such as OpenAI’s ChatGPT and Google’s AI chatbot Bard, are trained using data that generates human-like responses to user prompts. Since chatbots are used to pass data to third-party applications and services, the NCSC has said that risks from malicious “prompt injection” will grow.

For instance, if a user inputs a statement or question that a language model is not familiar with, or if they find a combination of words to override the model’s original script or prompts, the user can cause the model to perform unintended actions.

Such inputs could cause a chatbot to generate offensive content or reveal confidential information in a system that accepts unchecked input.

According to the NCSC, prompt injection attacks can also cause real world consequences, if systems are not designed with security. The vulnerability of chatbots and the ease with which prompts can be manipulated could cause attacks, scams and data theft. The large language models are increasingly used to pass data to third-party applications and services, meaning the risks from malicious prompt injection will grow.

The NCSC said: “Prompt injection and data poisoning attacks can be extremely difficult to detect and mitigate. However, no model exists in isolation, so what we can do is design the whole system with security in mind.”

The NCSC said that cyber-attacks caused by artificial intelligence and machine learning that leaves systems vulnerable can be mitigated through designing for security and understanding the attack techniques that exploit “inherent vulnerabilities” in machine learning algorithm.

Adapted from: The Guardian, Wednesday 30 August 2023, page 4.

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TEXT I

Decolonizing English Language Teaching for Brazilian Indigenous Peoples

In an era of increasing contact between citizens of the diverse nations of the world, the far-reaching impacts of globalization are often linked to the propagation of English as a language for international communication in a variety of settings, including international trade, academic and scientific discourses, and diplomacy, among others. Given its status as an international language, English is also a highly-valued foreign language in Brazil, and its influence represents, at least symbolically, greater access to both national and global markets. As such, federal curricular standards require all students in Brazilian public schools to study English as a foreign language from middle to high school.

These standards also apply to the indigenous populations of Brazil. However, additional federal legislation regulates the ways that English and other subjects must be taught in indigenous communities. The Brazilian Constitution, ratified in 1988, represents a significant landmark in this respect, providing for the inclusion of 'specific, bilingual, differentiated, and intercultural' educational practices within indigenous school settings, thus guaranteeing each indigenous group the right to integrate their traditional knowledge, cultures, and languages into primary and secondary education curricula (Brazil, 1988).

As such, the question of how to teach English in indigenous settings in a way that values traditional cultures and knowledge in accordance with the specific, differentiated, and intercultural approach mandated by federal legislation must be addressed. The status of English as the language of globalization, along with its long history as an instrument of colonial imperialism, poses an ethical dilemma in the Brazilian indigenous educational context, given that its inclusion in indigenous school curricula presents an implicit risk of recreating and reinforcing neocolonial hierarchies of knowledge production that favor Western perspectives over traditional indigenous systems of knowledge.

In an effort to adapt English language teaching to the needs and demands of indigenous communities, contributions from the fields of postcolonial theory, English language teaching, and sociocultural approaches to language teaching will be connected to current Brazilian laws governing indigenous education. The aim is to investigate the possibilities for the teaching of a decolonized, local English that values traditional indigenous knowledge systems over neocolonial global influences which are often associated with English.

Adapted from: https://www.scielo.br/j/edreal/a/43bj8bSQDpQYPjQTX9jK9jb/

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What Happens to Your Body When You Drink Milk Every Day

Milk (and dairy in general) gets the blame for a lot of unwanted health outcomes. We're sure you've heard that dairy causes acne, increases inflammation and can even be the reason you're not losing weight. Spoiler: For those who aren't lactose-intolerant or allergic to dairy, research doesn't back up those claims. In fact, there are actually some impressive benefits that come with drinking a nutritious glass of milk.

Your Bone Health Might Improve

Not only is milk a great vegetarian protein source, but it's also packed with calcium and vitamin D—two nutrients that are vital for bone health. Calcium is a mineral needed to build and maintain strong bones, and vitamin D helps our body absorb calcium from the foods we eat. Since milk is a great source of both of thesenutrients, it's one of the best things to keep in your diet for bone health throughout life.

You Might Reach Your Weight Loss Goals

There are lots of misconceptions about how drinking milk can affect weight, but research shows regular consumption probably won't hurt your cause if you're trying to lose weight or maintain a healthy weight. This is largely due to the satisfying combination of carbohydrates, protein and fat found in milk. Protein and fat can help make milk super filling, which can help with weight loss. Carbs give you energy and help your body function at its best. When you're more satisfied from the foods you eat, it's easier to honor your hunger and fullness levels and stick to a healthy, balanced eating pattern.

A meta-analysis of randomized controlled trials (the gold standard of research) published in the journal Nutrients found that including dairy in a calorie-restricted diet resulted in greater weight loss and fat loss, while reducing loss of lean muscle. This doesn't mean milk is a miracle weight-loss food, though. Another review of studies found that consuming milk or other dairy products didn't result in significant weight loss, but didn't lead to weight gain either. If your goal is to lose weight or maintain a healthy weight, drinking a glass of milk each day might help, if it's a food you enjoy. You Might Lower Your Risk of Cognitive Decline

The impressive nutrition profile of milk could be a reason why it can help you stay more mentally sharp as you age. A 2021 review of studies published in Nutrition & Metabolism found that milk intake was connected with a decreased risk of Alzheimer's disease. Another study published in 2020 in the journal Nutrients found that skimmed dairy, fermented dairy and buttermilk were associated with better executive functioning. So adding some milk to your morning oats or as a side to a snack may help boost your brain health.

Researchers hypothesize that one reason milk might support healthy aging is the nutrition that it provides. Milk is a good source of calcium, protein and vitamin B12, all of which are critical nutrients for older adults.

The Bottom Line

If you aren't lactose-intolerant or allergic to dairy, it's totally OK to enjoy a regular glass of milk each day. From improving bone health to helping mitigate cognitive decline, drinking milk and incorporating other dairy items into your diet can come with some health benefits. As with any food, remember that moderation is key (an 8-ounce serving of milk probably wouldn't completely fill many of the glasses in your cupboard). Since there are dairy farmers all across the U.S., try choosing milk that is produced locally. Making a connection with a local farmer can help you get a better-quality product that takes less of a toll on the environment, too.

FONTE: Adapted from: https://www.eatingwell.com/article/7961444/what-happensto-your-body-if-you-drink-milk-every-day/#:~:text=Not%20only%20is% 20milk%20a,from%20the%20foods%20we%20eat.

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I write with dismay in response to “Flurry of Drama in Sag Harbor” (Sunday Styles, June 23), about Justin Timberlake’s arrest in the Hamptons on a charge of driving while drunk.

The article, while including the particulars of Mr. Timberlake’s arrest, moves quickly to a lighthearted foray into the local community’s reaction to news coverage of the incident.

It would all be in good fun, of course, if not for the fact that, according to the Department of Transportation, each day in the U.S. an average of 37 people suffer serious accidents because of drunken driving, with alarming numbers revealed in 2022.

Instead of sharing those sobering figures, we get a local diner’s perspective that the news coverage of the arrest was over the top because Mr. Timberlake had not gotten into an accident.

That badly misses the point and, with it,The Times badly missed an opportunity to turn a spotlight on the deadly seriousness of drunken driving.

Brad Snyder

Menlo Park, Calif.

SNYDER, Brad. Patients Stunned by Their Medical Bills. Disponível em: https://www.nytimes.com/2024/06/25/opinion/patients-medicalbills.html?auth=login-google1tap&login=google1tap. Acesso em: 11 jul. 2024. Adaptado.