As noted in the study, HVAC Equipment, advances will be primarily driven by an expected rebound in nonresidential construction, along with continued strength in the residential remodeling market. Industry growth will benefit from the expected replacement of older HVAC systems with newer, more efficient systems.

However, says the study, U.S. gains will be restrained by projected declines in the number of new single-unit housing completions between 2002 and 2007. In addition, competition from imported equipment and maturing markets for many types of HVAC equipment will also restrain demand.

Driven in part by the relatively low initial costs of these systems, warm air furnace shipments represent half of all heating equipment shipments, the study says. Within the warm air furnace segment, electric-powered versions are projected to post the strongest average annual growth.

Among the major heating equipment segments, heat pumps account for the second largest share of shipments. Growth in heat pumps will be driven by their ability to provide efficient heating and cooling in moderate climates as well as serve as a low cost supplementary heating system in colder climates, reports The Freedonia Group.

Shipments of unitary air conditioners represent about three-quarters of all cooling equipment shipments, notes the study. Packaged terminal air conditioners and chillers are projected to post above average annual gains, benefiting from their use in industrial and commercial markets, two areas that are predicted to rebound over the forecast period.

Increases in HVAC equipment demand will be stimulated by growth in the nonresidential market, which accounts for 60 percent of sales volume in value terms, the study indicates. Increases in the nonresidential market will be driven by a projected increase in the commercial/industrial building market, as the installation of new or upgraded HVAC equipment is a key element of most construction projects, says The Freedonia Group.

These gains in the nonresidential market, however, will be restrained by building owners reconditioning their existing HVAC systems.

HVAC Equipment (235 pages) is available for $3,900 from The Freedonia Group Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For more information, visit www.freedoniagroup.com.

Publication date: 03/08/2004