Global demand for HVAC equipment is forecast to grow 5.7 percent annually to $120 billion in 2018. Growth will be stimulated by an expansion of reliable energy sources and increases in income levels in China, India, and other developing countries, making HVAC equipment more accessible to a larger number of consumers. A recovery in the housing markets in the US and Western Europe, along with rebounding consumer confidence levels, will also assist sales gains.
Additional demand will result from retro-fits as older inefficient HVAC equipment is switched out for new high efficiency models. As a result, interest will continue to expand for heat pumps, condensing boilers, split systems, and solar powered units. Changing regulations regarding refrigerants are also affecting HVAC equipment sales and the cooling equipment product mix. Under programs like the Montreal Protocol, countries are phasing out the use of hydrochlorofluorocarbons (HCFCs) such as R-22, which will drive sales of cooling systems using less environmentally harmful refrigerants.
The Asia/Pacific region was the largest market for HVAC equipment in 2013, with more than half of the global total. Growth will be spurred in large part by China, which will account for one-third of worldwide sales in 2018. Indonesia and India, however, will record the fastest gains. Rapid economic growth, as well as an expansion in electrification and greater product availability, has fueled demand for goods such as air conditioners in these and other developing Asian countries, and will continue to do so through the forecast period.
On a regional basis, North America is expected to achieve the most rapid gains through 2018. The US, which accounts for the largest share of North American demand, was adversely affected in recent years by the 2007-2009 recession and subsequent slow recovery. This caused consumers to cancel purchases -- either to replace an existing version or to add new equipment -- and to repair used equipment when possible. Sales growth will stem primarily from a release of this pent up demand.
Heat pumps will see the most rapid growth, based on lower penetration rates in many markets. Heat pumps are finding greater acceptance due to their multiple capabilities (many models feature both cooling and space heating, and some also have the ability to heat water), and higher efficiency compared to many other cooling or space heating units. In some nations, government financial incentive programs will boost sales.