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US HVAC Equipment Market, Freedonia

  • March 2015
  • 305 pages
  • Freedonia
Report ID: 2831969

Summary

Table of Contents

US demand to rise 6.8% annually through 2019

Demand for HVAC equipment is forecast to increase 6.8 percent annually through 2019 to $20.4 billion, recording gains at about twice the rate of the 2009-2014 period. In large part, advances will be the result of robust gains in building construction spending, especially growth in improvement and repair expenditures. Advances will also be propelled by rising demand for increasingly efficient HVAC systems and other types that have a higher degree of technological sophistication, as these are typically higher value systems. However, federal tax incentives targeted at high-efficiency systems installed in the residential market expired at the end of 2014. Because a number of homeowners took advantage of those incentives and replaced their HVAC systems ahead of schedule, the pool of units which needs replacement will be smaller, reducing sales in the short term. Shipments of HVAC equipment will grow 6.0 percent per year through 2019 to $16.5 billion. Imports will account for a growing share of demand for all HVAC products, exceeding 25 percent of the total in 2019..

Regulations to continue driving replacement demand

Regulations regarding refrigerant usage and equipment efficiency will continue to have a positive effect on HVAC equipment demand. For instance, the phase-out of R-22, which will be complete by 2020, will spur many HVAC equipment owners to replace their existing units before then. Upgrading current equipment to utilize alternative refrigerants is difficult or impossible and any remaining R-22 will become prohibitively expensive as virgin stocks are depleted. Additionally, incremental increases in minimum efficiency standards will continue to drive sales toward high-efficiency models which generally command a pricing premium.

Heat pumps & warm air furnaces to grow the fastest

Unitary air conditioners will continue to comprise the largest share of total HVAC system demand, accounting for 44 percent of sales by 2019. Advances will benefit from the projected rebound in nonresidential construction spending and the continued improvement in residential construction activity. Heat pumps and warm air furnaces will both post the fastest gains through 2019. Demand for heat pumps, which have heating and cooling capabilities, will be supported by rising sales in the nonresidential market where efficiency gains are of primary importance, particularly as more of the high-value geothermal types are installed. On the other hand, growth of warm air furnaces will largely be in the residential market, where they benefit from low initial costs.

Growth in residential market to outpace nonresidential

The nonresidential market will continue to comprise the larger share of overall HVAC equipment demand in value terms, due to the larger size of HVAC systems used in these buildings and their subsequently higher cost. However, growth in the residential market will significantly outpace that in the nonresidential market through 2019. The number of new housing units will improve substantially through 2019, providing ample opportunities for new residential HVAC equipment installations.

Study coverage

Details on these and other key findings are offered in HVAC Equipment, an upcoming industry study. It presents historical demand data (2004, 2009 and 2014) plus forecasts (2019 and 2024) by fuel type, equipment type and market. The study also considers market environment factors, examines the industry structure, evaluates company market share and profiles 32 US industry competitors, including Daikin, IngersollRand, Lennox and United Technologies

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