The air conditioning industry is set to experience an unprecedented boom in the ASEAN region based on figures released by BIS Oxford Economics.
Construction in the ASEAN region over the next decade, which will be driven by mega infrastructure projects, will outstrip North America and the European Union (EU).
A new report by BIS Oxford Economics, said construction in ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) combined with those in China, Hong Kong, India, Japan, South Korea and Taiwan, reached $US1.4 trillion in 2016. This figure is measured by gross value-added (GVA) in real terms in 2016.
This compares with the US sector’s GVA of $US648 billion, $831 billion for the EU sector’s combined GVA and the UK’s $130 billion.
Over the next five years, construction investment in Asia is expected to average $1.61trillion per year versus an expected value of $697 billion in the United States, and $890 billion in the EU. This dynamic growth in the construction sector will be driven by mega infrastructure projects, the report said.
Residential and non-residential construction will remain in robust shape, enjoying sustained, moderate growth to accommodate new and rising demand. India’s construction sector investment is currently around $130 billion a year, the third largest in Asia after China and Japan, and matching that of the UK.
Over the next five years, India’s annual construction investment is expected to jump by almost a third, averaging $170 billion per year, adding still more impetus to an Asia-wide building boom that looks set to last through the next decade and beyond, the report said.
Even to examine the South East Asia alone (Indonesia, Malaysia, Thailand and Vietnam), figures are still astounding. For example, the HVACR market will reach $13.63 billion by 2023, BIS Research said.
This market is primarily driven by the growth in the construction sector with HVACR growing at a CAGR of 9.30% from 2017 to 2023.
Geographically, Indonesia is the largest market in the SEA region in the year 2016 in terms of value with a market value of $3.03 billion.
The country is witnessing a high growth in hospitality and the food industry and the increased awareness and focus on energy conservation have further contributed to the growth of this market. Furthermore, Malaysia is expected to witness the highest growth of 6.5% during the forecast period.
In terms of the products, split air conditioners attributed for the highest market volume in 2016 and is expected to grow at a decent pace during the forecast period.
The demand is mainly expected to come from increased residential developments which have encouraged consumers to install energy efficient split units in homes, apartments and high/low end buildings.