Based on a recent study by ReportsnReports, the HVAC industry is expected to grow globally by nearly 7% compound annual growth rate (CAGR) between 2016 and 2020. A number of factors have led to this boost in demand for HVAC products and services for both residential and commercial applications, including industrialization efforts and a turn toward energy-efficient systems.
At the end of 2015, the Asia Pacific region held 51% of the HVAC market share. Looking forward to 2020, it is expected that this trend will continue, with China retaining its lead spot as a country with high demand for new construction HVAC and upgraded energy efficient models to replace older systems.
Currently, 67% of the HVAC market is made up of non-residential customers including schools, hospitals, manufacturing facilities and other commercial buildings. As industrialization continues to build around the world, this trend will continue as well. In fact, the industry as a whole is strongly leaning on a 69% market share of new equipment, rather than service. As smaller countries become industrialized and see considerable new construction across the board, this new equipment will be instrumental in getting their facilities operational.
Despite the heavy favoring of the commercial market sector, residential customers are also an important piece of the puzzle. Countries experiencing population booms will be headed toward urbanization, which will lead to a fair share of demand for residential system installations for housing projects in the near future.
Another major influencing factor on HVAC and construction alike is a slew of new local and international guidelines for efficiency, working conditions and more. New equipment used to accurately monitor environmental conditions inside of manufacturing plants, offices and hospitals will be required to ensure the safety of workers and cut down on wasted energy. Likewise, green technologies will become an even greater part of HVAC implementation as top-producing countries look to reduce their carbon foot print and meet global standards for clean energy initiatives.
An interesting new take on home and office automation has also had an impact on the industry as a whole, which will likely become more apparent in coming years. More and more systems are being integrated with the so-called “Internet of Things,” which has opened up the door for better connectivity and control with less human interference. It is both a convenient and efficient strategy that some of the top HVAC companies are taking advantage of. Global leaders like LG, Bosch, AB Electrolux, Hitachi and more are working on engineering new technologies to keep up with changing demands worldwide that allow for better automation and hands-off management. In addition, these new automated systems can better track performance over time, find trends, and adjust themselves according to predicted conditions rather than waiting for an individual to manually reset or change the system settings.
Overall, the 7% growth of the HVAC industry over the course of the next five years is going to be largely dependent on new construction around the world, but will also have a steady place in countries that are already industrialized as more companies seek to join the green revolution. Meanwhile, as more countries become industrialized, there will be a demand for both commercial and residential products and services that can keep up with their expansion.
At Howard Air, we know it is important for us to keep up with global trends in our industry as it allows us to better serve our customers with the latest technologies. If you have any questions or concerns about your HVAC system, please contact us today!