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What the future holds for worldwide HVAC equipment demand

June 05, 2006
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World demand for HVAC equipment is projected to rise over five percent per year through 2010, exceeding $65 billion. Demand in the Asia/Pacific region will outpace the global average, rising nearly seven percent annually through 2010. China will be the fastest growing national market, benefiting from above-average urban population growth and healthy gains in the number of households. Above-average growth will also occur in India due to solid gains in the number of households and rising per capita incomes. The other developing countries of Asia and Africa/Mideast will also post strong gains, reflecting rising standards of living in the regions. These and other trends are presented in World HVAC Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Although lagging the global average, advances in the developed regions will be fueled by generally favorable economic conditions and higher income levels. Gains in Western Europe will also result from increased consumer exposure to automotive air conditioning. As consumers become accustomed to the benefits of air conditioning, they will increasingly expect it in their homes. The US HVAC equipment market will also lag global gains, due to the relatively high rate of penetration for air conditioners. Growth in Japan will result from the nation’s economic recovery. Cooling equipment growth will continue to outpace heating equipment gains through 2010, reflecting the lower penetration rates of air conditioning equipment. Low ownership rates in Western Europe (relative to other industrialized nations such as the U.S. and Japan) will present opportunities. Among products, room air conditioners will post the strongest gains worldwide. Rising income levels in Asia, especially in China, will bolster demand for window-type air conditioners. In Western Europe, mini-split room air conditioners will post solid gains due to the lack of ductwork in most European homes.

The types of HVAC equipment used vary from region to region based on economic demographics and cultural preferences. In the U.S. there is a strong bias in favor of central air conditioning, with room air conditioners comprising less than 20 percent of cooling demand in value terms. On the other hand, in China, room air conditioners comprise 65 percent of cooling demand. In the heating equipment segment, warm air furnaces and heat pumps comprise three-quarters of U.S. demand—much higher than in other regions. Usage of these products in developing regions is limited by their high costs and lack of ductwork in existing buildings.

World HVAC Equipment study is available for $5,300.

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