World HVAC equipment demand to reach $120 billion

A market report indicates the HVAC equipment market will increase 5.7% annually to $120 billion in 2018. Much of this will be driven by developing countries.


The highest growth will occur in North America, due in part to postponed equipment upgrades. Courtesy: The Freedonia Group Inc.

Global demand for HVAC equipment is forecast to increase 5.7% annually to $120 billion in 2018. Growth will be driven by an expansion of reliable energy sources and increases in income levels in China, India, and other developing countries, making HVAC equipment more accessible to a larger number of consumers. A recovery in the housing markets in the United States and Western Europe, along with rebounding consumer confidence levels, will also support sales gains. According to analyst Pamela Safarek, “Additional demand will result from retrofits as older inefficient HVAC equipment is switched out for new high efficiency models.” These and other trends are presented in World HVAC Equipment, a new study from The Freedonia Group Inc., a Cleveland-based market research firm.

The Asia/Pacific region was the largest market for HVAC equipment in 2013, with 54% of the global total. Growth will be driven in large part by China, which will account for one-third of world sales in 2018. India and Indonesia, however, will record the fastest growth worldwide. Rapid economic growth, as well as an expansion in electrification and greater product availability, has spurred demand for goods such as air conditioners in these and other developing Asian countries, and will continue to do so through the forecast period. Limiting further growth in the Asia/Pacific region is the highly developed nature of the markets in Australia, Japan, and South Korea. These countries have relatively high market penetration rates of HVAC equipment, so sales growth will be primarily influenced by weather patterns, as well as by building construction levels and replacement activity.

The highest growth will occur in North America, due in part to postponed equipment upgrades. Courtesy: The Freedonia Group Inc.On a regional basis, North America is projected to achieve the most rapid gains through 2018, with HVAC equipment sales forecast to increase 6.8% per year from a low 2013 base. The U.S., which accounts for the largest share of North American demand, was adversely affected in recent years by the 2007-2009 recession and subsequent slow recovery. This caused consumers to postpone purchases—either to replace an existing version or to add new equipment—and to repair used equipment when possible. Sales growth will stem primarily from a release of this pent up demand. Rebounding housing activity will also contribute to gains, as HVAC equipment is commonly installed when a new house is built or an existing house is sold.

World HVAC Equipment (published in May 2014, 425 pages) is available for $6300 from The Freedonia Group Inc. 

No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
HVAC and building envelope: Efficient, effective systems; Designing fire sprinkler systems; Wireless controls in buildings; 2015 Product of the Year winners
2015 MEP Giants: MEP Giants annual report; Mergers and acquisitions; NFPA 2001; Fiber-optic cables; LED specifications
Hospital IAQ: Indoor air quality in health care facilities; NFPA 72; Water use and conservation; Net-zero buildings
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Implementing microgrids: Controlling campus power generation; Understanding cogeneration systems; Evaluating UPS system efficiency; Driving data center PUE, efficiency
Optimizing genset sizing; How the Internet of Things affects the data center; Increasing transformer efficiency; Standby vs. emergency power in mission critical facilities
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.