US HVAC Demand to Rise 6.8% Annually through 2019, Says Freedonia

March 30, 2015 By Linda Hardesty

FreedoniaDemand for HVAC equipment in the US is forecast to increase 6.8 percent annually through 2019 to $20.4 billion, recording gains over twice the rate of the 2009-2014 period, according to a report “HVAC Equipment” from The Freedonia Group.

In large part, advances will be the result of robust gains in building construction spending, especially growth in improvement and repair expenditures as replacement demand contributes approximately three-quarters of total sales in a given year. Advances will also be propelled by rising demand for increasingly efficient HVAC systems and other products that have greater technological sophistication, as these are typically higher value systems.

Unitary air conditioners will continue to comprise the largest share of total HVAC equipment demand, accounting for 44 percent of sales in 2019. Advances will benefit from the projected rebound in nonresidential construction spending and the continued improvement in residential construction activity. Heat pumps and warm air furnaces will both post faster gains. Demand for heat pumps, which have both heating and cooling capabilities, will be supported by rising sales in the nonresidential market where efficiency gains are of primary importance, particularly as more of the high-value geothermal types are installed. On the other hand, growth of warm air furnaces will largely be in the residential market, where they benefit from low initial costs.

The nonresidential market accounts for the larger share of HVAC equipment demand in value terms, due to the larger size of HVAC systems used in these buildings and their consequently higher cost. However, growth in the residential market will significantly outpace that in the nonresidential market. The number of new housing units will increase substantially, providing ample opportunities for new residential HVAC equipment installations. However, in both residential and nonresidential markets, replacement purchases will continue to account for the bulk of sales.

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