The Global HVAC Market

According to the World HVAC Equipment study, the global demand for HVAC equipment is projected to rise 6.1 percent per year through 2016 to $107 billion. This growth rate is an acceleration from the gains of the 2006-2011 period, reflecting in part the reduced 2011 bases of the developed countries as the global recession of 2009 restrained construction spending and reduced access to financing. Economic recovery and the corresponding improvement in construction activity in several key markets, particularly the large U.S. market, will aid gains through 2016, according to the study.

With a 7.6 percent annual growth rate projected, North America is anticipated to achieve the fastest average annual advances through 2016, boosted primarily by the U.S. recovery, according to the study. Gains in Canada will be slower, reflecting already high penetration rates and construction markets that were less affected by the global recession.

Demand growth in the Asia/Pacific region will outpace the global average, increasing 6.4 percent per year through 2016, said the study. Four of the world’s fastest-growing national markets are in this region. China will post the largest growth, comprising one-third of global demand gains from 2011 to 2016.

From 2011-2016, the World HVAC Equipment study forecasts the annual growth percentages for other regions of the world as follows:

• Central & South America: 5.2 percent

• Africa/Mideast: 5 percent

• Eastern Europe: 4.7 percent

• Western Europe: 4.2 percent

Growing Product Areas

According to the study, heat pumps will continue to post the fastest growth, reflecting the lower penetration rate in many markets, as well as the ability of these systems to provide both heating and cooling capabilities, and to offer greater energy efficiency than most other cooling systems. Demand for unitary air conditioners is also projected to post above-average gains globally, particularly in markets with strong nonresidential construction activity.

U.S. Refrigeration

The Commercial Refrigeration Equipment study predicts that, by 2016, the demand for commercial refrigeration equipment in the United States will increase 4.6 percent per year to $9.4 billion in 2016. Growth will result from improvements in capital investment and nonresidential construction expenditures. In addition, a positive outlook for the broader U.S. economy will encourage end users such as fleet operators and retailers to both expand existing operations and replace aging equipment. Food industry efforts to reduce operating costs, a byproduct of narrow profit margins, will create opportunities for suppliers of energy-efficient equipment.

Transportation refrigeration equipment will remain the largest commercial refrigeration equipment type, benefiting from the positive outlook for capital investment. Product innovations such as hybrid electric systems and products that utilize natural refrigerants like carbon dioxide will stimulate sales. Ice machines will also record above-average growth due to increased construction of hotels and motels, which are major end users of this equipment. Additionally, ice machines will benefit from the rising number of foodservice establishments and from technical innovations like remote monitoring.

Gains in all markets will benefit from users’ desire to increase efficiency, due to the narrow profit margins throughout the food industry. Aftermarket sales of commercial refrigeration equipment, which consist of both repairs and products purchased to replace existing equipment, accounted for 73 percent of demand in 2011 and will continue to comprise the majority of demand.

The percent of annual growth by equipment type for 2011-2016, according to the study is:

• Display Cases: 5.1 percent

• Beverage Refrigeration: 3.4 percent

• Transportation Systems: 5.9 percent

• Ice Machines : 5.4 percent

• Refrigeration & Freezers: 4.3 percent

• Other: 4.3 percent.

For more information on the studies, visit www.freedoniagroup.com.

Publication date: 8/13/2012