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The global heating, ventilation, and cooling (HVAC) system market size was USD 123.32 billion in 2018 and is projected to reach USD 191.35 billion by 2026, exhibiting a CAGR of 5.7% during the forecast period.
Increasing demand for advanced products such as smart HVAC systems as well as hybrid systems is driving the market. The growing energy concerns have resulted in rise in demand for energy efficient systems. Furthermore, the surge in construction activities in commercial and residential sector is likely to contribute significantly in the demand for heating, ventilation, and cooling (HVAC) system market. Also the demand from various industries such as food & beverage, Telecom as well as Data center is resulting in high product penetration. However, the lack of qualified professionals is expected to impact the market growth in the near future.
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Energy-Efficient HVAC Systems are Resulting in the Growth of HVAC System Market Revenue
The surge in demand for HVAC systems to reduce waste and lower energy consumption is expected to propel the market. Thus, the resultant increased adoption of energy-efficient systems is set to emerge as one of the top HVAC system market trends. Moreover, governments of various regions are increasingly upgrading energy efficiency standards. For instance, in 2015, the U.S. Department of Energy (DOE) increased the minimum Seasonal Energy Efficiency Ratio (SEER) rating to enhance energy efficiency and reduce energy cost. These standards came into effect in 2018.
Hybrid HVAC Systems are Taking the Market by Storm
The surge in demand for hybrid systems is expected to result in the heating, ventilation, and cooling system market growth. The benefits of hybrid systems such as automatic adjustment of the temperature according to the change in environment are gaining popularity among customers. Also, the high energy-efficiency of hybrid HVAC systems results in cost reductions, thus offering high returns on initial investments. In addition, the reduced environmental impact and increased system lifespan is resulting in a rise in demand for hybrid HVAC systems.
Technological Advancements in HVAC to Drive Uptake of HVAC Products
Rising demand for technologically advanced systems is likely to drive the HVAC market revenue. The growth in green-labeled products owing to the increased environmental awareness has given rise to the thermally driven air-conditioners. These air-conditioners use 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 automatically adjusts to current requirements, along with improved lifetime cost and efficiency. Furthermore, smart thermostats and sensors, which can be controlled remotely through apps, are gaining popularity among the customers, especially in commercial buildings in order to gain energy and cost-efficiency. For instance, in 2019, Daikin launched One+ smart thermostat, which offers two-way communication with its climate control systems.
The Emerging Data Center Market to Effect Change in the Market Trends
The rise in the adoption of multi-cloud services and IoT is resulting in high demand for data centers. Innovations in the data center technology to cater to the requirements of tech-savvy consumers are driving the heating, ventilation, and cooling system market trends. The growth in the data center market is expected to drive the technology demand for data center efficiency. Thus, liquid cooling and modularity are one of the emerging trends in the data center market. The manufacturers are, therefore, focusing on the solutions specific to the data center requirements. For instance, Johnson Controls offers YORK Mission Critical DEC Air Handling Unit, which caters to the modularity design trend prevailing in the data center industry. This product fulfills the phased data center expansion needs and partial power usage effectiveness.
The Increasing in Demand for Smart HVAC System Market is Expected to Propel Market
The smart heating, ventilation, and cooling (HVAC) systems market are gaining popularity owing to the increasing penetration of the Internet of things (IoT) and building automation solutions. The rising demand for customers for increased sustainable and efficient infrastructure is expected to drive the intelligent heating, ventilation, and cooling (HVAC) system market. This is attributed to the surge in smart cities development in emerging economies such as India, China and others. For instance, the government of India launched the smart cities mission in 2015. This is mission is fueling the growth of smart infrastructure solutions and is likely to result in the growth of the intelligent HVAC system market. Furthermore, the features including increasing connectivity, remote controlling and monitoring are driving the smart HVAC systems demand. The increasing demand from the commercial sector including offices, hospitality and others is resulting in the growth of the HVAC system market.
Shortage of Skilled Labor is Expected to Impact the Market
The lack of qualified technicians in HVAC industry over the past few years is expected to impact the market growth. According to the Bureau of Labor Statistics, U.S. has a shortage of more than 70,000 technicians. In addition, the 25% of the workforce is expected to be retried by the end of 2020, thus the increased need for skilled professionals. Furthermore, the companies will seek around 115,000 new HVACR qualified technicians in next four years. However, the companies are growing through strategic planning and providing various trainings to their employees. For instance, Daikin Learning Institutes deliver necessary training of the advanced HVAC technology as well as Daikin Applied is accredited by International Association for Continuing Education and Training. Moreover, Daikin also incorporates various training programs for its distributors too.
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Increasing Intelligent VRF Systems Evolution is Propelling the Market
Based on type, the market is segmented into the single split, variable refrigerant flow (VRF) systems, chillers, and others.
The single-split systems are most commonly used owing to their various benefits, including easy installation, quick & silent operation, cost-effectiveness, easy maintenance, add-on heating capacity, and others. Besides, the technological advances in VRF systems are expected to drive the HVAC system market demand. Moreover, VRF systems offer two or more controls in a single device. The manufacturers are thus focusing on the development of Intelligent VRF systems to cater to the needs of customers. For instance, DAIKIN Industries, Ltd. is focusing on the expansion of their intelligent VRF systems to provide customers with energy-saving diagnostics, air-conditioning lifecycle analysis, replacements proposals, and failure prediction. The manufacturers are striving for new product development with enhanced features, which is resulting in the growth of the heating, ventilation, and cooling system market. For instance, in 2019, Johnson Controls launched its YORK YZ Magnetic Bearing Centrifugal Chillers to its Middle East customers. This Chiller provides energy efficiency of more than 35%, optimum performance with low-GWP refrigerant, and reduced maintenance cost in the challenging Middle East environment.
Increasing Demand from the Commercial Sector is Resulting in the Market Growth
Based on application, the segment is broken down into residential, commercial, and industrial
Increasing construction activities in the residential and commercial sectors are resulting in the growth of HVAC system market. In addition to this, increasing demand from various sectors including institutional buildings, data and telecom centers, hospitals, restaurants, laboratories, and office buildings in developing economies is resulting in the growth of the commercial HVAC segment. Rising demand from the lodging sector is driving the heating, ventilation, and cooling (HVAC) system market. According to the AHR Expo and ASHRAE Journal Economic Outlook Survey, the lodging segment is expected to exhibit the fastest growth in prospects for commercial applications of HVAC systems. On the other hand, the industrial application is expected to witness steady growth over the forecast period, as per the HVAC system market analysis. The growth in the industrial sector will be a result of increasing demand from the food processing industry.
Asia Pacific Heating, Ventilation, and Cooling (HVAC) System Market Size, 2018 (USD Billion)
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Geographically, the scope of study is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America, which is further drilled down into countries.
Asia Pacific is expected to be the fastest-growing market owing to the increase in the increasing spending power of the customers. Thus, manufacturers are focusing on developing heating, ventilation, and cooling (HVAC) system to cater to regional requirements. For instance, Daikin is focusing on launching differentiated products in Asia including the multi-split air conditioners.
North America heating, ventilation, and cooling (HVAC) system market is expected to significantly contribute to the global market owing to the increasing demand from the residential use products. Also, the companies are performing strategic planning to boost sales in Mexico which in turn is expected to positively contribute to the growth of the HVAC system market in Latin America. Increasing demand for VRF systems is likely to result in the growth of the Middle East and Africa.
Johnson Controls to Engage in Acquisition Activities to Strengthen Product Portfolio
One of the leading player, John Controls is emphasizing on acquiring the companies, in order to enhance their presence and product portfolio. In October 2018, Johnson Controls acquired the Lux Products Corporation to strengthen its smart home thermostats product portfolio. In 2019, Johnson Controls launched smart thermostats GLAS which has a translucent OLED touchscreen display to control its functions and can be controlled using Cortana, Microsoft’s personal digital assistant.
Key Players are Focusing on Strengthening their High-End Product Sales and Distribution Network
It is being observed that, the prominent companies are planning to upgrade the product portfolio. This in turn, can help them to gain maximum traction of customer’s attention and can also help the distribution channels to encourage their strategies to increase sales. For example, Daikin is focusing on the development of dealers in the Asia Pacific region. The company will focus on the promotion of cost-effective inverter air conditioners especially in Thailand and Vietnam. Furthermore, in Japan, the company is expected to enhance its sales through differentiated and high-value-added products such as MULTI CUBE, Urusara 7 and risora.
The report presents a comprehensive assessment of the global heating, ventilation, and cooling (HVAC) system market by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches are adopted to make meaningful assumptions and views. Furthermore, the report offers a detailed analysis and information as per market segments, helping our readers to get a comprehensive overview of the global heating, ventilation, and cooling (HVAC) system market.
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Value (USD billion)
As per Fortune Business Insights study, the market value stood at USD 123.32 billion in 2018.
In 2026, the market is expected to reach USD 191.35 billion.
The market is projected to grow at a compound annual growth rate (CAGR) of 5.7% during the forecast period (2019-2026).
The single split systems segment is expected to lead the market owing to their increasing demand for easy operation, installation, and cost-effectiveness.
Evolving technological advancements and emerging data centers market are driving the global market.
Daikin, Carrier Corporation, and Johnson Controls are the leading companies in this market.
Asia-Pacific is the fastest-growing region in this market owing to the increasing consumer spending power and increasing residential and commercial infrastructure projects.
Increasing adoption of the hybrid HVAC system is one of the emerging trends in the market.
Increasing connectivity and remote monitoring and control are resulting in the popularity of the smart HVAC systems.
Commercial application is leading this market owing to the increasing demand from the lodging industry as a result of the surge in tourism in various regions.
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