The global heating, ventilation, and air conditioning (HVAC) market size, which was $240.8 billion in 2019, is expected to witness a CAGR of 4.8% during the forecast period (2020–2030), to reach $358.1 billion in 2030. The augmenting demand for energy-efficient air conditioning systems and governments’ proactiveness for their installation are projected to be the major driving factors for the HVAC industry.
The outbreak of coronavirus (COVID-19) is continuing to have a significant impact around the world, in the form of a huge downfall in sales as well as manufacturing activities. The decline in the customer spending on non-essential goods during the pandemic has resulted in further deepening of market growth as HVAC businesses have seen a notable decrease in business. However, some commercial HVAC businesses have seen an uptick in service calls coming from “essential” buildings, such as healthcare facilities and grocery stores, for regular servicing and maintenance and replacement of their HVAC systems.
Based on HVAC type, the cooling category accounted for the largest market share in 2019. The rising temperature and growing disposable income are expected to be the major factors behind the highest revenue CAGR of cooling systems across the globe during the forecast period. Further, the growing construction sector would also lead to a rise in the urbanization rate and subsequently create more demand for HVAC systems in the years to come.
Based on ventilation by equipment type, ventilation fans category registered a huge demand, mainly from the Asia-Pacific (APAC) region, where investments in residential, commercial, and industrial infrastructure have increased considerably during the historical period. The compliance with various international by regional manufacturers, such as Standard 62.2-2016 of The American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) for ventilation systems, which defines the acceptable indoor air quality (IAQ) to be maintained in residential and commercial buildings, contributed to the growth of the market during the historical period.
In the HVAC market outlook, based on cooling equipment type, room ACs category held the largest market share in 2019, and they are predicted to continue the trend during the forecast period. The replacement of used systems with energy-efficient variants is projected to drive the demand for VRF systems, which also exhibit cost-effectiveness and design flexibility during installation.
Based on end user, commercial is the leading category, mainly led by the rising number of offices and buildings and growing hospitality sector across the globe. The worldwide increase in tourist activities has resulted in a rise in infrastructure development projects in the hospitality sector. Further, upcoming events such as the FIFA World Cup 2022 in Qatar, which will involve the construction of numerous stadia, will result in growth in the HVAC industry size in the coming years.
Geographically, APAC was the largest region in the HVAC market during the historical period, and it is projected to also display the fastest advance throughout the forecast period. This is ascribed to the rapid economic growth, growing construction activities and surging urban population in regional nations, which are driving HVAC sales. With an increase in the disposable income, people in India and China are able to spend more on refrigeration and air conditioning systems, which, earlier, were considered a luxury.
The increasing preference for smart systems is a significant trend being observed in the global HVAC market. To reduce energy consumption and strengthen sustainability efforts, a large portion of customers is turning to smart HVAC technologies that offer better controls, advanced monitoring systems, and intelligent thermostats. Smart HVAC systems also provide better temperature variability and produce cleaner air as compared to conventional models. These systems further allow users to monitor the performance in real time, and they produce lesser noise than other systems.
According to a report published by PricewaterhouseCoopers (PwC), the overall spending on construction activities around the world will reach $15.5 trillion in 2030. India, China, the U.S., the U.A.E., Saudi Arabia, and Qatar are the key markets accounting for the majority of the spending. These countries are recording several construction projects, including skyscrapers, hotels, and shopping complexes, owing to the rising number of tourists, as well as major upcoming events, such as Dubai Expo 2020 (postponed till 2021) and FIFA World Cup 2022. Such developments are boosting the HVAC market growth globally.
The government of several countries is playing a major role in driving the growth of the HVAC market. The cost of repair and maintenance of old HVAC systems is high; hence, the replacement of old HVAC systems with new, energy-efficient ones, boosted by government initiatives, would drive the market. For instance, in December 2018, Ministry of Power (India) launched an initiative ‘Eco-Niwas Samhita 2018’, an Energy Conservation Building Code for Residential Buildings (ECBC-R). The code consists of minimum performance standards, to limit heat gain and loss. It applies to residential buildings and mixed-land-use buildings built on a plot area of ≥500 m2.
The global HVAC market players are investing substantially in research and development activities, to come up with more-advanced HVAC systems. It is, in turn, leading more product launches and facility expansions, to increase the manufacturing capacity of the company.
For instance, in December 2019, Johnson Control International PLC started the expansion of its air handling unit manufacturing facility in Hattiesburg, Mississippi, U.S. The additional 22,000 square feet of space will bring the facility’s total area to 120,000 square feet.
Moreover, in November 2019, Danfoss A/S launched six new AC and refrigeration systems and components in India. The products include Danfoss Intelligent Purging System (IPS)/air purger, Danfoss gas detector, Danfoss plate heat exchanger, EKE 400, IFCD defrost module, and ICSH 2-step solenoid valve.