The global air conditioning market is expected to grow by 3.7% in 2025 compared to the previous year, according to BSRIA’s 2025 Mid-Year AC Report. While global demand for cooling continues to rise, regional performance remains mixed due to economic uncertainty and regulatory transitions.
In the Middle East, growth is being driven by mega projects, rapid urbanisation, and high temperatures. The UAE reported a significant increase in chiller sales: screw chillers grew by 15%, scroll chillers by 14%, and centrifugal chillers by 9%, supported by real estate expansion, tourism infrastructure, and district cooling projects.
In Asia, Japan recorded high sales volumes amid intense heatwaves and increasing demand for HVAC upgrades in ageing residential buildings. Brazil also saw strong demand following its second-hottest summer on record. However, in India, sales slowed in 2025 after a strong 2024 due to overstocking and milder early weather. Nevertheless, structural demand remains strong, with 90% of single-split air conditioner purchases coming from first-time buyers and 60% of new units featuring inverter technology.
In Europe, Germany’s AC market continues to expand, with split system sales rising by 20%, driven by residential adoption and heat pump incentives. Spain’s chiller market grew by 14%, supported by tourism, healthcare investment, and growth in data centre infrastructure.
Globally, data centres have become the primary driver of growth in the chiller segment. Total chiller sales are projected to reach USD 11.6 billion in 2025, a 4.3% increase from 2024. Japan is developing approximately ten data centre projects with a combined capacity of up to 600 MW, including two 150 MW sites linked to SoftBank and OpenAI. In the UAE, Khazna’s 100 MW AI-optimised data centre is contributing to strong market momentum, while similar trends continue in the US alongside semiconductor and electric vehicle manufacturing.
Despite short-term volatility in some regions, BSRIA highlights urbanisation, digitalisation, and sustainability as key factors supporting long-term growth in the global AC market.