HVACR Manufacturers Confident Regarding Future of the Economy, Business
74 percent of respondents are forecasting growth rates of greater than 5 percent in 2018
WESTPORT, Conn. — Worldwide optimism among HVACR manufacturers about economic conditions and the outlook for their own businesses has soared to record highs, according to the latest AHR Expo and ASHRAE Journal Annual Economic Outlook Survey with 89 percent of responders forecasting excellent or good growth, which is up 15 percent from the already positive outlook in 2017.
That optimism also translated into higher 2018 sales forecasts for the industry, with 74 percent of respondents forecasting growth rates of greater than 5 percent, jumping 14 percent when compared to the 65 percent of responders who predicted high growth in 2017.
The strong 2018 growth forecast is even more impressive considering how robust business was this year. In 2017, sales increased significantly — more than 10 percent year-on-year — for 34 percent of the responding organizations. That’s up nearly 50 percent from a year ago when only 23 percent reported sales growth greater than 10 percent above 2016 levels.
Business is clearly better overall, with 69 percent reporting higher sales in 2017 versus 57 percent in 2016.
“With this overwhelmingly positive outlook for next year’s HVACR business, more and more industry professionals will need to search out the newest and best equipment and products available to them. This makes the AHR Expo a must-attend event for those who need to keep up with advancing technology,” said Clay Stevens, manager of the AHR Expo.
The survey supports the importance of attending the AHR Expo to stay current with the state of the industry. About two-thirds of the responding organizations reported they will be introducing new technology and products at this year’s Show. Cosponsored by ASHRAE and Air-Conditioning, Heating and Refrigeration Institute (AHRI), the AHR Expo will be held Jan. 22-24, 2018, at McCormick Place in Chicago and is held concurrently with ASHRAE’s Winter Conference.
MARKETS AND DRIVERS
Drilling down into specific market segments, survey participants were the most bullish about the residential, light commercial, office buildings, and manufacturing/industry sectors with 70 percent forecasting excellent or good growth in those segments. Following close behind were heavy commercial, schools and institutional buildings, data/telecom centers, and hospitals, each of which ranked in the 60-69 percent range. But the rosy outlook spanned all the markets with each achieving 50 percent or better forecasts for excellent or good growth in 2018.
One shift in the 2018 outlook is that new construction was identified as the biggest market driver as opposed to maintenance/replacement, which was seen as the biggest driver in 2017. New construction was cited by 45 percent of respondents as the growth engine for 2018, leaping ahead by 50 percent from the 2017 survey, when only 30 percent saw new construction as the biggest driver.
In terms of customer requirements, reliability was first with initial costs and energy efficiency close runners-up as the factors expected to be the most influential in their 2018 buying decisions. The importance of these three considerations is unchanged from the 2017 survey, when they were also ranked the highest by respondents. The Annual Economic Outlook Survey of HVACR manufacturers is sponsored by AHR Expo and the ASHRAE Journal.
For more information, visit www.ahrexpo.com.
Publication date: 01/08/18