HVAC Equipment Manufacturing
Brief Excerpt from Industry Overview Chapter:
Companies in this industry manufacture residential and commercial heating, ventilation, air-conditioning (HVAC), and air-purification equipment, as well as commercial refrigeration equipment. Major US-based companies include Lennox, Nortek, Trane, and the climate control divisions of Johnson Controls and United Technologies; other leading companies include BBT Thermotechnik (Germany), Daikin Industries and Yazaki (both of Japan), Danfoss (Denmark), and Gree (China).
Global demand for HVAC equipment is forecast to increase by about 4% per year, reaching a value of $122 billion by 2020, according to Freedonia. Leading countries for HVAC equipment manufacture include China, Germany, Japan, and the US. Global growth is expected to be driven by construction activity in emerging markets, primarily in the Asia/Pacific region.
The US HVAC equipment manufacturing industry includes about 1,500 companies with combined annual revenue of about $43 billion.
Demand for HVAC equipment depends on replacement rates of existing equipment, residential and commercial real estate construction, and home sales, all of which can be cyclical. The profitability of individual companies depends on efficient operations and effective marketing. Large companies enjoy economies of scale in buying manufacturing equipment and raw materials. Small companies can compete effectively by specializing in product niches. The US industry is concentrated: the top 50 companies account for about 65% of revenue.
About 20% of US production of HVAC and commercial refrigeration equipment is exported. Top export markets include Canada, Mexico, Saudi Arabia, China, and the United Arab Emirates.
Imports, which come largely...
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