SAN JOSE, Calif. — The global market for cooling towers is projected to reach $2.6 billion by the year 2018, driven by improving economic conditions and more stringent environmental regulations, according to new report by Global Industry Analysts Inc.

The global cooling towers market registered a significant slowdown in sales during the 2007-2009 economic recession. Decline in commercial and industrial building construction activity squeezed opportunities for cooling towers. In the chemical industry, plant shutdowns, capacity adjustments, and decline in investments impacted new orders. Large-scale postponements in establishment of new electric utilities and upgrades of existing utilities also came as a blow to the cooling towers market.

The market staged a recovery in 2010, thanks to a resurgence in growth fundamentals such as improvement in the macroeconomic environment, greater consumer confidence, acceleration in commercial building construction activity, and increased investments in infrastructure projects, particularly electric utilities and improvement of business conditions in key markets such as chemicals, food processing, dairy, paper and pulp, and plastic, among others.

More stringent environmental regulations are also expected to drive growth in the cooling towers market across the globe. The U.S. Environmental Protection Agency (EPA), for instance, is proposing that existing once-through cooling systems at industrial and power plants, which demand significant water inflows, be replaced with closed-loop cooling systems using cooling towers that bring down water inflow by over 90 percent. Government regulations mandating use of closed-loop systems for cooling will therefore drive demand for cooling towers in a range of industry segments. Growing focus on greener buildings is also helping drive replacement of aging cooling equipment with new, more energy efficient models.