According to a research by Freedonia Group, US demand for HVAC equipment is forecast to increase 6.8% annually through 2019 to $20.4 billion, recording gains at about twice the rate of the 2009-2014 period. In large part, advances will be the result of robust gains in building construction spending, especially growth in improvement and repair expenditures. Advances will also be propelled by rising demand for increasingly efficient HVAC systems and other types that have a higher degree of technological sophistication, as these are typically higher value systems. “However – the research explains – federal tax incentives targeted at high-efficiency systems installed in the residential market expired at the end of 2014. Because a number of homeowners took advantage of those incentives and replaced their HVAC systems ahead of schedule, the pool of units which needs replacement will be smaller, reducing sales in the short term. Shipments of HVAC equipment will grow 6 percent per year through 2019 to $16.5 billion. Imports will account for a growing share of demand for all HVAC products, exceeding 25% of the total in 2019”.
Regulations regarding refrigerant usage and equipment efficiency will continue to have a positive effect on HVAC equipment demand. For instance, the phase-out of R-22, which will be complete by 2020, will spur many HVAC equipment owners to replace their existing units before then. “Upgrading current equipment to utilize alternative refrigerants is difficult or impossible – the research explains – and any remaining R-22 will become prohibitively expensive as virgin stocks are depleted. Additionally, incremental increases in minimum efficiency standards will continue to drive sales toward high-efficiency models which generally command a pricing premium”.
As regards to the different appliances, unitary air conditioners will continue to comprise the largest share of total HVAC system demand, accounting for 44% of sales by 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 the fastest gains through 2019. Demand for heat pumps, which have heating and cooling capabilities, will be supported by rising sales in the nonresidential market where efficiency gains are of primary importance. On the other hand, growth of warm air furnaces will largely be in the residential market, where they benefit from low initial costs.
