And so, yes, as time goes on, we’ll find out how we can motivate the contractor to do more repair parts than they’ve done in the past. But there’s a tradeoff to that, obviously. Do you want replacement units and parts? I don’t think the two necessarily go hand in hand.Barry Logan Dave. I think I don’t know the answer, but I’ll add my editorial to it. There’s a commercial element to that discussion probably that’s pretty significant. I don’t know market share in the commercial applied aftermarket parts business, but I have a feeling it’s a pretty complex machine, and my guess is that some of this long term development can come there. And as Paul said, it’s been elusive, I think, for all the OEMs in that sector.Operator Our next question here will come from Jeffrey Sprague with Vertical Research Partners.Jeffrey Sprague Hey, thank you.
Good morning, everyone. You sound a little under the weather, Al. Hope you’re feeling okay.Albert Nahmad It’s my spring cold. Every spring I have to weather the cold. It’s just a simple cold, but thank you for asking.Jeffrey Sprague Yes. Obviously, a lot of cross currents going on the revenue line. I just wondering if you could unpack that a little bit for us, right. We got carryover price, we got new price, we got the SEER change. I mean it’s clear volumes are down, right. But can you give us a little bit of granular detail on the interplay of volume, price and mix?Albert Nahmad Well, I would say that all the things that you mentioned are positive for us. I don’t see anything in front of us other than good things, and we have the scale to take advantage of that.
But let’s get a little more granular with you, Barry and Paul than anybody else. Rick, if you want to jump in as well.Barry Logan Sure. Good morning, Jeff. Yes, I mean, first units are down in the quarter. We expected that, the industry expected that. It’s mid-single digits in terms of decline. Pricing was up very high single digits, which is just more of a mix benefit this quarter. Again, the OEM pricing came later and we’ll actually have some carryover benefit into the second quarter. But this quarter pricing is largely mixed and near double digits. And as far as commercial and that type of thing, commercial is up well into double digit territory, which is probably two and a half years now of trend. And to give you some sense of that, I think if we look out into the season, you still have a lag in the full market converting to the new higher tier systems.
You have the northern part of the market catching up to the Sun Belt with new systems at higher prices. The manufacturers will all be asked further pricing actions this year, but as a group, most were effective March 1, which carries into the second third quarter. And what Al is referencing is 2023 has really three things going on that are remarkable too, which is the refrigerant change, the heat pump growth and tax credits and so on that could play a role and influence this. If I add a fourth one that I think is somewhat unique to Watsco, our ductless business, which is a big business for us, it’s not centric, so to speak, to the US OEMs, but it’s a growing part of the market. There’s a lot of growth, a lot of investment, a lot of new territories for us in that market.
So I think, all-in-all, once we get past some of this early comparable difficulty that we have, that’s Al’s frame of mind is we’re pretty optimistic about the rest of the year.Paul Johnston If I can add on to that a little bit the impact of 25C with the tax credits coming in for the high efficiency product really wasn’t in our mix in the first quarter. We really didn’t see a lot of evidence of, a lot of tailwinds coming from the tax credit. So we’re looking forward to that second and third quarter as we start seeing more of that. And then exactly what Barry is saying the sell-through of the existing heat pumps is still going through. And we really haven’t seen the benefit of the high efficiency heat pumps have not yet flowed through into the marketplace.
So we’ve got some good upsides that we’re looking at for Q2 and Q3.Jeffrey Sprague And maybe just a clarification on refrigeration. Are you saying you think the refrigeration change that happens in 2025 will already have some kind of positive impact on ‘23 in terms of pre buy or things like that? Or were you kind of referring to something else?Albert Nahmad No, we’re preparing to when the rule comes in. We are not interested in that.Paul Johnston That’s not going to impact us until late ‘24.Operator And our next question will come from Nigel Coe with Wolfe Research.Nigel Coe Good morning, Al. Sorry, I was on mute there. Hope you feel better soon. Quick question on inventory. So a much bigger build in inventory than certainly what we’d expected.
So I’m just wondering, was that magnitude of inventory build intentional? Are there any other factors you need to bear in mind?Albert Nahmad Well, part of it, as I suggested in previous calls, is the supply chain issue is that we would get in a system, just part of one system, and we got the inventory at so we get the rest of the system. And that still lingers. We still have inventory of that sort. It’s good inventory eventually would get into the pipeline and into the market. And I do believe we have more inventory at the moment than I’d like to see. But we’re going into the season, so it’s not a bad problem to have. As I said earlier, some OEMs are still having issues with supply, the product that we need. But it’s good inventory, and eventually, I think we’ll get it right size and pre turns, and that improves cash flow even beyond where we are today.
