BSRIA has reported 3.7% year-on-year growth in the global air conditioning (AC) market for 2025, attributing the increase to extreme weather, changing construction cycles, and the rising demand from data centres. The organisation highlighted that while global demand continues to expand, regional performance remains uneven due to regulatory disruptions and economic uncertainty.
Lisa Wiltshire, Business Manager – Market Intelligence at BSRIA, stated: “The global outlook for the AC market remains largely positive, with further growth forecast as 2025 draws to a close. However, it has been a mixed year, with the market seeing contrasting demand in different parts of the world.”
The report identifies three key trends shaping the industry: growing demand for cooling in data centres, adoption of low-GWP refrigerants and higher efficiency standards, and increased global competition led by Chinese manufacturers.
The Middle East showed strong growth, with the UAE’s chiller market expanding due to large-scale developments and high temperatures. Screw chillers grew by 15%, scroll units by 14%, and centrifugal chillers by 9%. Japan recorded new sales highs driven by heatwaves and the need to upgrade residential systems. Brazil’s AC market also benefited from the second-hottest summer on record, while African markets saw significant first-half growth linked to heatwaves.
In India, sales slowed in 2025 following a record 2024, but long-term fundamentals remain strong, with 90% of single-split units bought by first-time users and 60% using inverter technology. Europe showed contrasting growth: Germany’s split system sales rose 20% due to residential demand and heat pump incentives, while Spain’s chiller market grew 14% on the back of tourism, healthcare investments, and an expanding data centre pipeline.
Data centres are now the largest growth driver for the global chiller market, which is projected to reach USD 11.6 billion in 2025, up 4.3% from 2024. Projects in Japan, the UAE, and the US—particularly in Texas and North Virginia—are contributing significantly to this trend.
In China, demand grew in early 2025 but softened due to the real estate downturn, with the VRF and chiller markets expected to decline by over 5%. However, Chinese manufacturers are expanding globally, offering competitive pricing and local production that is reshaping market dynamics. In Brazil, split system prices have fallen by up to 20% due to Chinese competition.
Despite regional volatility, BSRIA concludes that urbanisation, digital infrastructure, and the shift to sustainable technologies continue to support long-term AC market growth.
