Global HVAC Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2024-2032)

HVAC Market Outlook

• AI-based smart voice-controlled HVAC systems are expected to create innovative opportunities in the market.

• Smart building solutions are considered a crucial factor while buying or renting in the real estate market.

• The Asia Pacific holds the largest market share due to the rising usage of AC in the region.

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HVAC Market Growth

The growth in construction activities across residential homes, commercial offices, and industrial settings and the growing demand to minimise energy consumption are some of the major factors driving the HVAC market growth. The increase in the number of net-zero buildings in the construction sector will also be an upcoming trend, which is expected to increase the HVAC market value as the goal of these buildings is to reduce overall energy consumption and lower the environmental impact. The global demand for HVAC is also projected to increase due to factors such as rising population, rapid urbanisation, and growing disposable income.

HVAC Industry Outlook

New Constructions and Renovation Projects Aid the Demand for HVAC Systems

According to the International Energy Agency (IEA), by 2050, space cooling is projected to account for the largest share of the global increase in electricity demand, contributing 37%. This surge is attributed to the rising global temperatures and increasing use of air conditioning systems, particularly in emerging economies. Residential appliances are expected to contribute 26% to the growth in electricity demand, driven by the proliferation of household devices and the expansion of the middle class in developing regions. Heating demands will account for 12% of the total growth, reflecting the need for climate control in colder regions. Lighting will represent 8% of the increase, while other services, encompassing a variety of electrical uses in both residential and commercial sectors, will constitute 17%.

As per HVAC industry analysis, an expanding residential and commercial construction aids the demand for HVAC systems, globally. China is expected to dominate the global construction market, accounting for 31% of the total market share by 2037. This dominance reflects China's continued emphasis on urbanization, infrastructure development, and industrial expansion. Major projects, including the Belt and Road Initiative, extensive urban housing developments, and large-scale transportation networks, are expected to drive this growth.

The United States is projected to hold 13% of the global construction market by 2037, making it the second-largest market. The U.S. construction sector will be fueled by investments in residential, commercial, and infrastructure projects. Government initiatives to modernize aging infrastructure, along with sustained demand for residential and commercial spaces, is expected to underpin growth. Additionally, investments in sustainable and smart building technologies will further increase the HVAC industry revenue.

As per U.S. Census Bureau, between 2018 to 2024, the total housing units in the United States demonstrated a steady upward trend. In Q1 2018, the housing inventory stood at 137,920 thousand units, increasing to 138,203 thousand units by Q2 2018 and further to 138,778 thousand units by Q4 2018. The growth continued through 2019, with the inventory reaching 139,069 thousand units in Q1 and rising to 139,961 thousand units by Q4. In 2020, the number of housing units increased from 140,266 thousand units in Q1 to 141,251 thousand units by Q4. This upward trajectory persisted in 2021, starting at 141,589 thousand units in Q1 and reaching 142,697 thousand units by Q4, thus aiding the growth of the HVAC industry. The trend continued in 2022, with the inventory growing from 143,105 thousand units in Q1 to 144,332 thousand units by Q4. In 2023, the total housing units increased from 144,740 thousand units in Q1 to 145,967 thousand units by Q4. By Q1 2024, the inventory peaked at 146,375 thousand units.

HVAC Industry Statistics in India

India is expected to capture 7% of the global construction market by 2037. This significant share is driven by rapid urbanisation, population growth, and substantial government investments in infrastructure. Key initiatives such as the Smart Cities Mission, affordable housing schemes, and large-scale transportation projects will contribute to this growth. India's focus on improving urban infrastructure and expanding industrial capacities will be pivotal in the construction sector, thus aiding the HVAC industry in India. Germany is anticipated to account for 5% of the global construction market. Germany's construction sector is characterized by high standards in residential and commercial building, driven by a strong economy and robust regulatory framework.

Key Trends and Recent Developments

Growing preference for condensing boilers; growing demand for sustainable HVAC systems; and the rise of smart HVACs are the major trends impacting the market growth

July 31st 2022

Carrier Global Corporation, a provider of eco-friendly and intelligent building solutions, gained the acquisition of residential and light commercial HVAC business ventures in Toshiba Carrier Corporation.

Oct 23rd 2023

Mitsubishi Electric Corp. announced the development of an aluminium vertical tube design which can enhance the heat exchange capabilities of heat pump AC by around 40 per cent, thus impacting the HVAC market development.

Jan 22nd 2024

Sensibo, a climate tech IoT company, announced the launch of an AI-based smart heating and cooling solution which utilises the capabilities of ChatGPT.

Jan 23rd 2024

LG Electronics (LG), a consumer electronics company, unveiled its latest HVAC solutions at Expo 2024 such as LG's R32 air-to-water heat pump and multi-position air handler heat pump, among others.

Growing preference for condensing boilers in the market

Condensing boilers offer multiple benefits such as low energy consumption, reduced energy bills, and compact size to the users.

Ductless HVAC to continue its upward trajectory

Ductless HVAC systems offer the functionalities of both heating and cooling in one unit, which reduces the installation, maintenance, and energy costs.

Growing demand for sustainable HVAC systems globally

Sustainable HVAC offers an energy-efficient solution for residential houses and businesses as they offer efficient usage of resources and reduce waste. This is a key trend of HVAC market.

Smart HVAC to witness substantial growth in coming years

Smart HVAC is the HVAC system in which the heating and cooling adjustments can be made via smartphone from even thousands of miles away.

HVAC Market Trends

One of the trends increasing the HVAC demand is the increasing preference for condensing boilers in the market. HVAC systems are used for both cooling and heating in regions with extreme weather conditions and the furnace, as well as boiler systems, are the two main systems for heating purposes in the systems. The technology-based on furnace is prominent in the North American and Asian markets, while kettle systems dominate the European market. The key benefit of the boiler systems, based on radiant or convection heat, includes continuous heat, good consistency of temperature, advanced technology controls, easy maintenance, and longer condensing boiler life.

Sensibo launched a smart HVAC system, which utilises the ChatGPT model to understand simple as well as complex requests of users. It can also offer recommendations based on the user behaviour such as an automated AC schedule depending on the most common time a consumer uses AC, which can result in potential energy savings.

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HVAC Industry Segmentation

“HVAC Industry Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Equipment

• Heating

• Ventilation

• Cooling

Market Breakup by Implementation Type

• New Constructions

• Retrofits

Market Breakup by End Use

• Residential

• Commercial

• Industrial

Market Breakup by Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

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HVAC Market Share

The cooling segment continues its dominance in the market due to the rising demand for AC in warm climates

The cooling segment occupies a significant portion of the HVAC market share as it is crucial for maintaining comfortable indoor temperatures, particularly in warmer climates or during hot seasons. In homes, HVAC systems often include air conditioners, either as standalone units (like window or portable air conditioners) or as part of a central system that cools the entire house. Ductless mini-split systems are popular in homes without existing ductwork, offering efficient cooling for individual rooms or zones.

Commercial buildings such as offices, shopping malls, hotels, and educational institutions use larger-scale HVAC systems for cooling, increasing the demand of HVAC market. These systems often include central air conditioning, chillers, and rooftop units that are capable of cooling large spaces efficiently. Furthermore, the ventilation segment is expected to gain sizeable growth in the coming years as ventilation can improve the indoor air quality of a building.

The residential sector maintains steady growth due to the rising popularity of eco-efficient HVAC systems

The HVAC market demand growth is driven by the demand for HVAC (Heating, Ventilation, and Air Conditioning) industry in the residential sector which is influenced by a variety of factors, reflecting the needs and preferences of homeowners for comfortable, efficient, and sustainable indoor living environments. In regions with extreme temperatures, either hot or cold, the need for efficient heating or cooling systems is higher.

Homeowners are increasingly seeking energy-efficient HVAC systems to reduce energy bills and environmental impact. A booming real estate market also leads to more new construction and, subsequently, new installations of HVAC systems. The commercial sector is expected to grow steadily in the forecast period, due to the rising installation of HVAC in offices, malls, and other commercial buildings to enhance the comfort of people.

What Factors are Driving the Growth of the Global HVAC Market?

• The market benefits from urbanization, industrialization, and rising standards of living, which drive the need for heating, ventilation, and air conditioning systems.

• Continuous innovation in HVAC technology, such as smart thermostats, energy-efficient systems, and IoT integration, enhances product appeal and performance, thus positively influencing the HVAC market demand forecast.

• Modern HVAC systems are designed to be more energy-efficient, which attracts environmentally conscious consumers and meets regulatory requirements.

• HVAC systems are used in various sectors, including residential, commercial, industrial, and automotive, providing a broad customer base and multiple revenue streams.

What Challenges are Impacting the Global Market for HVAC?

• The installation of HVAC systems can be expensive, which may deter cost-sensitive consumers and small businesses.

• Regular maintenance is essential to ensure optimal performance of HVAC systems, which can be a burden for some users due to the additional costs and effort involved.

• Installing HVAC systems often requires skilled labour and can be complex, particularly in retrofitting older buildings which is hindering the growth of the HVAC market.

• Despite improvements, HVAC systems still consume significant energy.

• Economic downturns can reduce spending on new installations and upgrades of HVAC systems.

• Stringent environmental regulations and changes in energy efficiency standards can increase compliance costs and impact product designs.

• Dependence on global supply chains for components can make HVAC manufacturers vulnerable to disruptions, affecting production and delivery timelines.

What are the Opportunities in the Global HVAC Market?

• Increasing focus on green building certifications and sustainable construction practices drive demand for energy-efficient HVAC systems.

• Growing adoption of smart home technologies presents opportunities for HVAC systems integrated with home automation and IoT.

• The need to replace outdated and less efficient HVAC systems in existing buildings offers a substantial market for upgrades and retrofits, thereby presenting several HVAC market opportunities.

• Integrating HVAC systems with renewable energy sources like solar power can provide sustainable solutions and attract environmentally conscious consumers.

Competitive Factors in the Global HVAC Market

• The integration of IoT and smart technologies in HVAC systems is a significant competitive factor.

• Innovations in energy-efficient systems are crucial. 

• As per HVAC market dynamics and trends, a wide range of products catering to residential, commercial, and industrial applications can help capture a broader market. 

• Companies with strong brand recognition and a reputation for reliability and quality are preferred by consumers and businesses alike.

• Competitive pricing strategies, including offering value-added features at similar price points, can attract cost-conscious consumers.

• An extensive and efficient distribution network ensures that products are readily available across various regions, enhancing market penetration.

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HVAC Market Regional Analysis

As per the HVAC market analysis, The Asia Pacific region is one of the largest and fastest-growing markets for HVAC systems globally. The region encompasses a wide range of climatic conditions, from the cold climates of Northern China and Japan to the tropical climates of Southeast Asia and India. This diversity leads to varied HVAC needs, with some countries requiring more heating solutions and others focusing more on cooling, thereby aiding the HVAC market demand. Rapid urbanisation and economic growth in countries like China and India have led to significant construction activity, both in residential and commercial sectors, driving the demand for HVAC systems.

Meanwhile, North America is expected to grow significantly in the foreseeable future, owing to the growing retrofit projects in the region, which boosts the installation of HVAC systems and adds to the market revenue.

Competitive Landscape

The market players are introducing novel and energy efficient technologies to stay ahead in the competition, further increasing their collaboration efforts to meet the evolving regulatory landscape

Lennox International, Inc., based in Texas, the United States, is a provider of climate control products. Founded in 1895, the company specialises in offering innovative technologies in the HVAC sector.

LG Electronics, Inc. is a consumer electronics company, headquartered in Seoul, South Korea. Some of its other specialities include home appliances, home entertainment, and B2B products, among others.

Carrier Global Corporation, based in New York, United States, is a multinational provider of HVAC systems. The company offers eco-efficient products for residential, commercial, and transport sectors, among others.

Daikin Europe NV unveiled a range of residential air-to-air heat pump products on December 4th, 2023, which are specifically designed for cold climates.

Other HVAC companies in the market are Samsung Electronics Co. Ltd., Haier Smart Home Co., Ltd., Emerson Electric Co., Honeywell International Inc., and Johnson Controls International plc, among others.

Strategic Initiatives of Top HVAC Companies

Daikin Industries Ltd.

• Heavy investment in research and development to innovate new technologies, including energy-efficient and environmentally friendly HVAC solutions will likely aid the growth of HVAC market.

• Focus on expanding market presence in emerging economies with high growth potential.

• Commitment to sustainability through the development of green technologies and reducing the environmental impact of its products.

Carrier Global Corporation

• Incorporation of smart technologies and IoT in HVAC systems to enhance energy management and customer convenience.

• Strengthening global presence through strategic acquisitions and partnerships.

• Emphasis on developing energy-efficient products.

Johnson Controls International plc

• Development of digital and smart building solutions to optimie HVAC system performance and energy efficiency.

• Commitment to reducing carbon emissions and improving energy efficiency across its product portfolio.

Trane Technologies plc

• Significant investment in research and development to drive innovation and introduce cutting-edge technologies, positively impacting the HVAC market revenue.

• Focus on developing sustainable HVAC solutions that reduce environmental impact and improve energy efficiency.

• Enhancing customer experience through customized solutions and robust after-sales support.

Lennox International Inc.

• Investing in advanced technologies to improve product performance and energy efficiency.

• Expanding into new geographic regions and increasing market share in existing markets.

Key Highlights of the Report

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HVAC Market Size

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HVAC Market Regional Analysis