CLEVELAND — Global demand for HVAC equipment is forecast to increase 5.7 percent annually to $120 billion by 2018, according to a new study from The Freedonia Group Inc., a Cleveland-based market research firm. Growth will be driven by an expansion of reliable energy sources and increases in income levels in China, India, and other developing countries, making HVAC equipment more accessible to a larger number of consumers. A recovery in the housing markets in the United States and Western Europe, along with rebounding consumer confidence levels, will also support sales gains.

According to analyst Pamela Safarek, “Additional demand will result from retrofits as older inefficient HVAC equipment is switched out for new high-efficiency models.”

The Asia/Pacific region was the largest market for HVAC equipment in 2013, with 54 percent of the global total, says the report. Growth will be driven in large part by China, which will account for one-third of world sales in 2018. India and Indonesia, however, will record the fastest growth worldwide. Rapid economic growth, as well as an expansion in electrification and greater product availability, has spurred demand for goods such as air conditioners in these and other developing Asian countries, and will continue to do so through the forecast period. Limiting further growth in the Asia/Pacific region is the highly developed nature of the markets in Australia, Japan, and South Korea. These countries have relatively high market penetration rates of HVAC equipment, so sales growth will be primarily influenced by weather patterns, as well as by building construction levels and replacement activity.

On a regional basis, North America is projected to achieve the most rapid gains through 2018, with HVAC equipment sales forecast to increase 6.8 percent per year from a low 2013 base, the report says. The U.S., which accounts for the largest share of North American demand, was adversely affected in recent years by the 2007-2009 recession and subsequent slow recovery. This caused consumers to postpone purchases — either to replace an existing unit or to add new equipment — and to repair existing equipment when possible. Sales growth will stem primarily from a release of this pent up demand. Rebounding housing activity will also contribute to HVAC gains.

For more information on the World HVAC Equipment report, visit

Publication date: 5/12/2014

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