The global heating, ventilation & air conditioning (HVAC) market was valued at $US156.44 billion in 2021, and is expected to be worth $US231.11 billion in 2027, growing at a CAGR of 6.72 per cent during 2022-2027.
Research and Markets presented a positive outlook for the HVAC industry with the focus shifting toward energy efficiency.
This has been evident in the shift to eco-friendly HVAC units and products that use less power and run on renewable energy sources.
“Technology and energy efficiency are two buzzwords that OEMs are aiming to target in the short term in order to remain relevant and profitable,” the market research firm said.
The residential sector is the fastest growing segment, growing at CAGR of around nine per cent during the forecasted period, and Research and Markets said developing markets will drive this growth.
Asia Pacific dominated the HVAC market, accounting for more than 50 per cent of revenue in 2021.
“Rapid urbanisation, population growth and rising consumer disposable income have all contributed to the region's phenomenal growth over the years. Recently, the commercial sector has expanded, creating opportunities for future regional growth,” according to the firm.
Growth drivers
One of the key drivers of the market's expansion is the increasing adoption of sustainable building designs. Rising awareness amongst the population about the energy efficiency of HVAC equipment and aftermarket services are pushing the economies towards the adoption of sustainable building designs.
The growth in green-labelled products due to increased environmental awareness has given rise to thermally driven air-conditioners. These air-conditioners utilise both natural gas, as well as solar energy, thus ensuring energy efficiency.
Other significant growth factors of the market include, increasing population, increasing construction activities, growing smart thermostat market, intensifying annual mean temperature, and escalating e-commerce retail sales.
However, rising fluctuations in the price of iron ore and copper has restricted the availability of major raw materials (copper, iron and steel), which are used for manufacturing HVAC. These fluctuations have disrupted market revenues.
Emerging trends
The market is projected to grow at a fast pace during the forecast period, due to the emerging home automation market.
The customer preference for comfort is opening up new opportunities. To meet demand, OEMs are developing products that are not only energy-efficient, but also incorporate cutting-edge technologies for improved connectivity.
Today's buildings are "green", which has led to an increase in the installation of thermostats, sensors, and smart metres that can be controlled via smartphone or PC.
HVAC systems with software are also trending and are expected to create opportunities over the forecast period. Technology is slowly infiltrating the HVAC market, opening up opportunities for long-term growth.
New digital technologies like artificial intelligence (AI) and Internet of Things (IoT) will support continued growth.
The HVAC market is moderately concentrated. To strengthen their position in the market, some of the leading competitors are pursuing various growth methods such as mergers, acquisitions, collaborations and agreements.