World HVAC Equipment

World demand to rise 6.1% annually through 2016
Global demand for HVAC equipment is forecast to rise 6.1 percent yearly through 2016 to $107 billion. This growth rate is an acceleration from the gains of the 2006-2011 period, reflecting in part the reduced 2011 bases of the developed countries as the global recession of 2009 restrained construction spending and reduced access to financing. Economic recovery and the corresponding improvement in construction activity in several key markets, particularly the large US market, through 2016 will boost gains.

US, China to remain key HVAC equipment markets
The North America region is expected to post the fastest growth rate through 2016, boosted primarily by the US recovery. Gains in other developed areas, such as Canada and Japan, will be slower, reflecting already high penetration rates and markets that were less affected by the global recession. Low air conditioning system ownership rates in Western Europe (relative to other industrialized nations) will offer opportunities, although gains will be limited by the slowest regional growth in building construction expenditures through 2016. However, regulations regarding energy efficiency and the use of more environmentally friendly refrigerants will boost sales of HVAC equipment in developed markets.

Demand growth in the Asia/Pacific region will also outpace the worldwide average, increasing 6.5 percent per year through 2016. Four of the world’s fastest growing national markets are in this region, led by India and Indonesia with double-digit annual gains. Rapid growth in building construction spending, along with rising industrialization and per capita incomes, the ongoing modernization of the housing stock, and opportunities arising from the relatively low penetration rates will aid advances.

China will register the largest growth, comprising one-third of global demand gains from 2011 to 2016. Market gains have predominantly been spurred by the nation’s rapid industrialization, resulting in large increases in building construction expenditures, as well as by rising personal incomes and government supports that boosted market penetration in rural areas. Government subsidies supporting the purchase of more energy efficient systems will continue to aid gains. China has also grown into the world’s leading supplier of HVAC equipment, benefiting not only from its relatively inexpensive labor pool, but also from its favorable exchange rates, which have made the price of Chinese goods especially competitive. However, the growing cost of labor, materials, refrigerants, and energy, coupled with duties imposed on imported Chinese HVAC equipment in some parts of the world, is expected to erode the country’s advantage somewhat through the forecast period.

Heat pumps, unitary air conditioners to pace gains
Sales of all types of HVAC equipment are expected to improve through 2016 from reduced 2011 bases. However, heat pumps will continue to achieve the fastest growth rates through the forecast period. These gains reflect the lower penetration rates in many markets, as well as the ability of these systems to provide both heating and cooling capabilities, and greater energy efficiency than most other cooling systems. Demand for unitary air conditioners is also projected to exhibit above average gains globally, particularly in markets with strong nonresidential construction activity.

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