Heating, Ventilation, and Cooling (HVAC) System Market Size, Share & COVID-19 Impact Analysis, By Type (Single Split Systems, Variable Refrigerant Flow (VRF) Systems, Chillers and Others), By Application (Commercial, Residential and Industrial), and Regional Forecast, 2022-2029

The global heating, ventilation, and cooling (HVAC) system market was valued at USD 142.72 billion in 2021 and is projected to grow from USD 149.80 billion in 2022 to USD 215.23 billion by 2029, exhibiting a CAGR of 5.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with HVAC systems experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global HVAC system market had exhibited a decline of 4.6% in 2020 as compared to 2019.

Heating, ventilation, and cooling systems are utilized to transfer air between indoor and outdoor areas. They filter the indoor air to keep the environment healthy and maintain humidity at an optimal comfort level.

Increasing demand for hybrid heating, ventilation, and cooling systems is an emerging trend. The increasing demand for automatic adjustment of temperature is complementing the growth of hybrid systems. Additionally, the surge in construction activities in commercial and residential sectors and demand from food & beverage and telecom industries are anticipated to contribute significantly to the market growth. However, the lack of qualified professionals is expected to impact the market growth in the near future.

COVID-19 IMPACT

Adverse COVID-19 Impact Resulted in Halt of Manufacturing Processes

The COVID-19 pandemic has had an unprecedented impact on the global economy since the first case was reported in December 2019. In the first quarter of 2020, the pandemic adversely affected the global heating, ventilation, and cooling system market growth. This is attributable to the lockdown effect across countries, such as Ireland, Germany, the U.S., China, and others. The lockdown has not only halted the manufacturing process but also reduced the customer demand for the equipment.

However, the demand for air filters across residential usage, purified air supply across commercial buildings, and minimization of suffocated air over industrial areas is expected to boost the penetration of heating, ventilation, and cooling systems in the forthcoming years. Additionally, governmental bodies, such as the Federation of European Heating, Ventilation and Air Conditioning Association, ASHRAE, and others, are employing mitigation tactics that can further reduce the possibility of the system becoming contaminated with the COVID-19 virus.

For instance, ASHRAE has recommended strategies in order to mitigate the transmission of COVID-19. The strategies are as follows:

• Differential Room Pressurization.


• Dilution Ventilation.


• Laminar and other in-room Glow Regimes.


• Source Capture Ventilation.


• Ultraviolet Germicidal Irradiation (UVGI).


• Unitary or Central Filtration.

This, in turn, is expected to complement the rising demand for these systems amid the current crisis.

LATEST TRENDS

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Rising Preference for Hybrid HVAC Systems to Propel Market Growth

The surge in demand for hybrid systems is expected to lead to the growing demand for heating, ventilation, and cooling systems. The benefits of hybrid systems, such as an automatic adjustment in temperature due to changes in the environment are gaining popularity. For instance, in October 2019, Carrier introduced Carrier Hybrid Heat that utilizes a gas furnace and electric heat pump as a heating source to react to changing environments. Also, the high energy efficiency of these systems results in cost reductions, thus offering high returns on initial investments. Besides, the reduced environmental impact and increased system lifespan result in the rising demand for hybrid systems.

DRIVING FACTORS

Technological Advancement across Systems to Bolster Industry Growth

The rising demand for technologically advanced heating, ventilation, and cooling systems is expected to drive market growth. The growth in green-labeled products due to increased environmental awareness has given rise to thermally driven air-conditioners. Manufacturers, such as Lennox International Inc., Daikin Industries, Ltd., and others are offering advanced systems. These air-conditioners utilize both natural gas as well as solar energy, thus ensuring energy efficiency. The additional benefits offered are low maintenance, independent control of pipes for heating and cooling purposes, and automatic adjustments to current requirements, along with improved lifetime cost and efficiency.

Smart thermostats and sensors, which can be controlled remotely through apps, are gaining popularity among the customers, especially in commercial buildings, to gain energy- and cost-efficiency. This is expected to contribute to the global heating, ventilation, and cooling (HVAC) system market growth in the forthcoming years.

RESTRAINING FACTORS

Shortage of Skilled Labor to Impact the Market Growth

The lack of qualified technicians for heating, ventilation, and cooling systems is expected to impact the market growth over the past few years. According to the Bureau of Labor Statistics, the U.S. experienced 25.0% of workforce retirement till 2020. Besides, the companies are likely to seek around 115,000 new heating, ventilation, cooling and refrigeration qualified technicians in the next four years. Therefore, a shortage of skilled technicians is expected to hinder the growth of the market in the forthcoming years.

SEGMENTATION

By Type Analysis

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Variable Refrigerant Flow (VRF) Systems Segment to Portray Highest CAGR owing to Multiple Control Function in One Device

Based on type, the market is segmented into single split, variable refrigerant flow (VRF) systems, chillers, and others.

Single-split systems are most commonly used owing to their several benefits, such as easy installation, quick & silent operation, cost-effectiveness, easy maintenance, add-on heating capacity, and others. Whereas, the VRF systems sub-segment is expected to showcase the highest CAGR as these systems offer two or more controls in a single device.

By Application Analysis

Commercial Segment to depict highest CAGR due to Expansion of Buildings

Based on application, the market is divided into residential, commercial, and industrial.

The increasing construction activities in the residential and commercial sectors are fueling the growth of the market. The surging demand from various sectors, such as institutional buildings, data and telecom centers, hospitals, restaurants, laboratories, and office buildings in developing economies results in the commercial segment's growth.

The industrial application is expected to witness steady growth over the forecast period owing to stable HVAC system market across industrial applications.

REGIONAL INSIGHTS

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Geographically, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America, further grouped into countries.

Asia Pacific is expected to hold the highest position in the global heating, ventilation, and cooling system market. This is owing to the increasing spending power of the customers. Thus, manufacturers focus on developing heating, ventilation, and cooling systems to cater to regional requirements.

India to Experience Highest CAGR as leading Manufacturers Focus on Facility Expansion

India is emerging as one of the leading countries across the Asia Pacific. The governmental bodies are offering foreign direct investment (FDI) schemes that benefit the manufacturers. Owing to this, manufacturers such as DAIKIN INDUSTRIES, Ltd., Johnson Controls, and others emphasize manufacturing and development facilities for heating, ventilation, and cooling systems. For instance, in October 2019, Johnson Controls–Hitachi Air Conditioning launched a new state-of-art development center by investing USD 22.5 million in Gujarat, India. The focus could be on developing commercially packaged air conditioners and residential air conditioners for India, Middle East, Southeast Asia, and European markets.

The increasing need for commercial heating, ventilation, and cooling systems across European countries is expected to drive the market. Moreover, stringent government norms to stabilize cost-effective units are boosting the market growth.

The market in North America is expected to showcase significant growth in the forthcoming years. This is attributed to the increasing demand from the residential sector. With IoT integration, several manufacturers have already initiated the smart HVAC system offerings with green technology, compatibility with smart devices and higher energy efficiency. This in turn, is propelling to drive HVAC adoption across Canada and the U.S. in the future.

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Several manufacturers are strategically planning to boost sales in Mexico, which is expected to positively contribute to the growth of the market in Latin America. Whereas the increasing demand for VRF systems is likely to result in the growth of the market in the Middle East & Africa.

KEY INDUSTRY PLAYERS

Prominent Players Focus on Strengthening High-End Product Sales and Distribution Network

Prominent players including Johnson Controls, DAIKIN INDUSTRIES, Ltd., LG Electronics, and Carrier are planning to upgrade their heating, ventilation, and cooling (HVAC) system portfolio. This, in turn, is helping distribution channels to encourage increasing sales. For example, Daikin focuses on developing dealers across Thailand and Vietnam to promote cost-effective inverter air conditioners.

In April 2020, LG Electronics expanded its unique allergen-reducing home appliance portfolio, which is certified asthma & allergy friendly by the experts at the Asthma and Allergy Foundation of America (AAFA) for advanced sanitization and cleaning facilities in the U.S.

Johnson Controls Emphasizing Acquisition Strategies to Strengthen its Product Portfolio

Johnson Controls is emphasizing acquiring companies to expand its product portfolio and market reach. For instance, in October 2020, Johnson Controls introduced an ASHRAE approved high-efficiency ‘KOCH Multi-Pleat Green13 Filter’ to protect occupants from the COVID-19 spread. It is an affordable upgraded solution that provides improved protection level as compared to HEPA filtration upgrades of filter and equipment.

LIST OF KEY COMPANIES PROFILED:

• Johnson Controls (Ireland)


• DAIKIN INDUSTRIES, Ltd. (Japan)


• Lennox International Inc. (U.S.)


• Carrier (U.S.)


• Mitsubishi Electric Corporation (Japan)


• Nortek Global HVAC LLC (U.S.)


• LG Electronics (South Korea)


• Emerson Electric Co. (U.S.)


• Trane (Ireland)


• SAMSUNG (South Korea)

KEY INDUSTRY DEVELOPMENTS:

• May 2021 - Johnson controls introduced ‘R-454B’, a primary low-GWP refrigerant in company’s commercial unitary and ducted residential products and air-cooled screw chillers across North America. With this, the company is re-addressing the climate change for sustainable planet.


• January 2021 - Trane introduced ‘Wellsphere’, a holistic approach to cultivate healthy indoor spaces by enhancing air quality, acoustics and lighting. With this approach, the company is supporting the building owners to navigate indoor environmental concerns.

REPORT COVERAGE

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The global heating, ventilation, and cooling (HVAC) system market research report provides detailed insights into the market. Some of them are growth drivers, restraints, competitive landscape, regional analysis, and challenges. It further offers an analytical depiction of the market, current trends, and estimations to illustrate the forthcoming investment pockets. The market is quantitatively analyzed from 2022 to 2029 to provide the financial competency of the market. The information gathered in this report has been taken from several primary and secondary sources.

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