PUNE, India — The U.S. residential HVAC market is forecast to see significant growth due to lower unemployment and gas prices, coupled with higher consumer confidence and pent-up demand. The commercial HVAC market is expected to see more steady growth, with continued nonresidential construction recovery which still has some room to run, according to a new market research report from ReportsnReports.
U.S. RESIDENTIAL MOMENTUM CONTINUES, REPLACEMENT RATES ACCELERATING
Replacement rates have steadily risen over the past few years following historically low levels coming out of the recession, and are now accelerating towards the high end of historical ranges as replacement demand is released into the market. This will be further boosted by positive fundamentals with high consumer confidence and low unemployment and gas prices, which have historically correlated strongly with replacement rates. It is estimated that the U.S. residential HVAC market will achieve 11 percent growth in 2016 and 5 percent in 2017.
U.S. COMMERCIAL HVAC STABLE
Based on 5 percent growth in ongoing nonresidential construction recovery and stable 3 percent growth in replacement, it is estimated that the commercial HVAC market will achieve 4 percent growth in 2016 and 2017, respectively. 2015 was a strong recovery year for nonresidential construction while 2016 could most probably witness some slowing. While most HVAC players’ revenue has recovered on regulatory change and pricing, commercial HVAC volumes are still 20 percent below peak, which means there is still some room to run in this market.
DUCTLESS MARKET REMAINS A KEY THEME
Ductless continues to be a key strategic theme in the industry, which could represent 15 percent of the industry for both residential (about 9 percent) and commercial (about 6 percent). While key obstacles such as first cost, lack of installed base, and aesthetics limit the penetration gains in what should remain largely a ducted unitary market, it is starting to show better adoption rates as energy efficiency gains and flexibility in installation outweigh the higher first cost in many instances. Almost all U.S. OEMs have built up joint ventures/partnerships with foreign suppliers, and it is expected that there will be a well above market average growth rate in ductless.
INTENSIFIED TECHNOLOGY COMPETITION AMONG SUPPLIERS
With most OEMs boasting new capabilities, inverter technology is another key strategic theme. Inverter compressors appear to be contained solely within the high-end systems now, with key players expressing interest in spreading this technology to more mainstream systems. In the near-term, there should be no dramatic change.
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Publication date: 7/11/2016