After a positive start at the beginning of 2020, the US economy has been hit hard by the rapid spread of Covid-19, initially limited to the North East and West and then extending to most of the States. Widespread temporary business closures and the disruption of supply chains have negatively affected business activities in Q2, with economic output reducing by 33%. After a more positive Q3 with many signs of economic recovery, it is anticipated that the last quarter of the year will be much weaker as the effects of the economic damage become more persistent due to the continuous progress of the pandemic and the uncertain outcome of the presidential election. The overall GDP for 2020 is expected to fall by around 5%.
The US air conditioning market is quite mature, with resilient residential market demand supported by good growth in construction over recent years. Despite a small erosion of this market segment in Q2, due to supply disruption, this market is likely to see more stable demand going forward.
The light commercial market for rooftops and VRF products was hit more profoundly and is likely to experience a more prolonged impact as demand is dwindling from key verticals such as retail (rooftops), hospitality, commercial offices and education.
By contrast, the close control market has fully benefited from the Covid-19 crisis despite the inevitable and temporary market drop caused by the lockdown in early 2020. An order backlog and pipeline of projects show that the market is benefiting from a boom in the demand from IT, healthcare and telecommunication.
Large commercial sectors, industrial healthcare and the Government sectors have seen a better performance. In the post Covid-19 period a fast recovery is expected in these segments, along with increases in average selling prices as the skill shortage of technicians in construction and HVAC impacts on labour costs.
2023 will be an important year for the market. A recovery is expected and efficiency standards for ducted splits and rooftop units are set to be enhanced, with possibly new refrigerants required, at least in some States such as California.
The trend towards efficiency and carbon footprint reduction remains the most important driver in product selection. Concerns regarding indoor air quality have been amplified by the health crisis and are set to trigger upgrade investments even when the emergency abates.
Overall, the US air conditioning market is expected to reach USD 19.5 billion in 2020; a decline of just over 7% compared to 2019.
A detailed qualitative and quantitative analysis of current trends for the individual products in the AC residential and commercial markets can be found in BSRIA's in-depth air conditioning report for the US market. Each product module covered in the report is segmented by size (volume and value), key local drivers and forecasts, competitor analysis, market verticals and distribution. The US in-depth AC report is now available for sale.
BSRIA will continue to report on the global air conditioning market performance. Currently the September 2020 release of World AC data can be purchased. The next market updates will be published in December 2020 (Europe edition) and in March 2021 (Global edition).