A 7 percent global growth rate is nothing short of a miracle, but that’s what ReportsnReports projects for the HVAC industry over the next three years. This demand comes from several influences, but perhaps the main ingredient is industrialization efforts geared towards more energy-efficient systems.
Near the end of 2015, the Asia Pacific region held on to 51 percent of the HVAC market and it looks like that trend will continue well into 2020, as China continues to upgrade new and improved models to replace older systems. This demand comes from a global need to improve systems and “go green.”
Development in the United States
Perhaps what’s even more impressive than the global growth of this industry is the growth in the United States, which is predicted to be a whopping 16 percent in 2016-2017. This report also assumes emerging technologies will continue to grow while a distinguished price discipline remains the same, or also increases with technology.
Howard Air writes:
“Despite the heavy favoring of the commercial market sector, residential customers are also an important piece of the puzzle. Countries experiencing population booms will be headed toward urbanization, which will lead to a fair share of demand for residential system installations for housing projects in the near future.”
The HVAC market will continue to grow as long as replacement rates continue to accelerate. These numbers have grown a great deal in recent years after the US recession, which wounded the country’s economy. However, as the economy improved this caused a reduction in gas prices and unemployment rates, which in turn equated to more HVAC upgrades.
Major Growth Trends
Approximately 67 percent of the HVAC market is built upon non-residential customers like hospitals, schools, manufacturing plants, and commercial buildings. These are, of course, the ingredients to any functioning society, so as industrialization continues to expand worldwide, the trend will grow in its persistence.
Within industrialization, the bulk of the incoming profits (around 69 percent of the market) are actually focused on new equipment rather than services. Thinking back on that global growth number, this refers specifically to smaller countries that are seeking new construction and, therefore, need brand new equipment.
In addition to the commercial market, residential customers are another vital factor for such major growth in a short period of time. Within the residential puzzle piece, countries who are seeing major population growth and urbanization will require installations for homes, apartments, condos, and so on.
Ductless Market Key Theme
RnR Market Research confirms that the ductless market also remains a key theme in the steady growth of global HVAC systems. RnR writes, “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).”
The key obstacles within the ductless market continue to be cost, a missing initial base, and some aesthetic issues. However, the ductless system is currently showing higher adoption rates due to green technologies and the flexibility of these systems. Therefore, only time will tell if these numbers also affect the growth of this market.
Since the urge to replace one’s HVAC system typically comes from wanting more energy efficient technology, the “go green” mindset combined with new international guidelines, equates to the replacement of old equipment. This new equipment can monitor exterior environmental conditions, along with interior conditions in plants, offices, or hospitals to make sure workers remain safe.
New regulations will likely continue to emerge as well, seeing as top-producing countries will want to cut down on their carbon footprint in order to meet (or exceed) international standards for clean energy. Again, China is one of the key players here who will be required to keep up energy efficient models countrywide.
Beyond required regulations, other upgrades will continue as systems are now linked to the Internet. For both commercial and residential use, the idea of having better control and connectivity with any network is becoming the norm. Companies such a Bosch, LG, AB Electrolux, and Hitchi are currently focusing on these new technologies to keep up with global demand.
At Lee Company in Nashville, Tennessee, we understand how important it is to keep up with global and continental trends, while also embracing the latest technologies.
Combined with 70 years of service, we offer the best heating, ventilation and air conditioning (HVAC) services that are concurrent with customer demands. Feel free to visit us online to start attending to any of your HVAC needs: leecompany.com/hvac/nashville-tn/.