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Nov. 26, 2007: HVAC Demand in U.S. Expected to Grow 3.2 Percent per Year

November 26, 2007
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CLEVELAND - According to a new report from the Freedonia Group, a market research firm, demand in the United States for HVAC equipment is forecast to increase 3.2 percent per year to $16.8 billion by 2011.

The report, titled “HVAC Equipment,” notes that advances will be primarily driven by strong gains in nonresidential construction, along with ongoing growth in the residential replacement market. Although gains will be restrained by projected declines in new single unit housing completions between 2006 and 2011, nearly three-quarters of HVAC demand is attributable to replacements.

Growth in the replacement sector will benefit from rising interest in more energy efficient systems driven by rising energy prices, spurring the replacement of older HVAC equipment with newer models, says the report. Changing regulations regarding minimum efficiency requirements for many of these systems will also affect sales of HVAC equipment.

Heat pumps are expected to stay the largest, fastest growing heating type. Heat pump shipments reached $2.1 billion in 2006, accounting for the largest share of total heating equipment shipments with 43 percent. Additionally, they are expected to post the strongest gains through 2011.

Heat pump shipments benefit from the ability of these units to provide efficient heating and cooling in moderate climates from a single system, the report says.

Benefiting in part from the relatively low initial costs of these systems, warm air furnace shipments totaled nearly $2 billion in 2006.

Shipments of unitary air conditioners amounted to $6.9 billion in 2006, representing 83 percent of all cooling equipment shipments.

Unitary air conditioners and packaged terminal air conditioners are forecast to achieve above average annual gains, benefiting in part from their use in the industrial and commercial markets, two areas that are expected to post strong recoveries in construction spending through 2011.

Publication date: 11/26/2007

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