Study: Demand for HVAC Equipment to Grow

August 2, 2010
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CLEVELAND - A recently released study has projected that global demand for HVAC equipment will rise 6.2 percent per year for the next four years.

As reported by the Freedonia Group, an industry market research firm, the global demand for equipment is projected to rise to $93.2 billion in 2014, compared to $68.9 billion in 2009. The study broke down the global market into four basic regions - North America, Western Europe, Asia/Pacific, and other - and predicted growth in every region. Breaking out the larger regions by country, the study projected a recovery in the U.S. market and the fastest growth in the Chinese market.

According to the study, the U.S. market declined 0.6 percent per year from 2004 to 2009. However, the study predicted 8.1 percent annual growth for the United States from 2009 through 2014.

Michael Deneen, a senior industry analyst for the Freedonia Group, said, “What’s interesting in this study is that the U.S. has one of the best outlooks this time.”

The strong growth rate reflects recovery from a dismal 2009 level. “We’re going to bounce back from where we were,” Deneen said. The study anticipates that the U.S. market will recover and post increasingly strong demand for HVAC equipment in residential construction.

In addition, the study expects the Chinese market to grow 9.3 percent per year through 2014. According to the executive summary of the study, “China will be the fastest growing national market and comprise about 40 percent of the growth in global demand.”

Deneen added that there are many reasons for the growth in China. “On a macro level, there’s a new middle class that’s just growing with people wanting HVAC for their homes, and more and more institutions and office buildings are being built with HVAC.”

He noted that the Americans and the Japanese have historically spent the most per person on HVAC. “But as standards of living are rising, people are becoming more like us in that sense - wanting some of the comforts we have. And that’s opportunity, so that’s a good thing.”

In addition, the study noted that above-average growth is expected in India “due to solid gains in building construction expenditures, a growing number of households, and rising per capita incomes.”

Highly developed countries, such as Canada and Japan, will see slower growth rates, according to the study.

The study also reported its projections for the types of equipment that will be in future demand. According to the study, “cooling equipment growth will continue to outpace heating equipment gains through 2014, reflecting the lower penetration rates of air conditioning equipment.”

Room air conditioners are projected to show the greatest gains, particularly in China. The study also noted that demand for mini-split room air conditioners is projected to grow in Western Europe “due to the lack of ductwork in most European homes.” Additionally, chillers are expected to post strong gains as nonresidential construction spending increases.

According to the study’s report on HVAC equipment manufacturers, the top five producers include Carrier (United Technologies), Daikin Industries, Trane (Ingersoll-Rand), LG Electronics, and GD Midea. These companies accounted for over 40 percent of global market share in 2009, the report stated.

For more information, visit www.freedoniagroup.com.

Publication date: 08/02/2010

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