HVAC Systems & Services Market Analysis by Offering (Equipment, Services), End User (Commercial, Industrial, Residential) - Global Industry Trends and Growth Forecast to 2030

Market Overview

The HVAC systems & services market size stood at $206.6 billion in 2021, and it is expected to grow at a CAGR of 5.0% during 2021–2030, to reach $319.9 billion by 2030.

The varied global climatic conditions and the strong need to maintain an ambient environment in a building are the key reasons that will positively impact the market over the forecast period. In recent times, smart features and higher energy efficiency have been the key purchase criteria for most customers, and the trend is expected to gain traction over the next few years.

The global product sale is being propelled by the rapid pace of urbanization and industrialization. As a result, the number of companies, manufacturing units, and residential complexes that utilize such equipment is experiencing a high rate of increase.

Moreover, global warming, predominately due to greenhouse emissions, has led to a rise in the temperature, which has been a major driving force for the demand for heating, ventilation, and air conditioning across the globe. According to NASA’s Goddard Institute of Space Studies (GISS), since 1980, the average global temperature has increased by 0.5 degrees C per year. Furthermore, some parts of North America and almost the whole of the MEA and APAC experience subtropical and hot climate, resulting in intensely hot and humid summers.

Moreover, climate change has resulted in an inflated use of cooling equipment in the summer and of furnaces, boilers, and unitary heaters in the winter. Climate change impacts building power consumption and air conditioning loads, which vary depending on the ambient temperature and humidity.

Moreover, the energy efficiency of these systems is projected to improve as a result of the new regulatory requirements. This has paved the way for smart controls to be included in buildings' modern heating and air conditioning units. Further, the growing population, increasing consumer disposable income, and the booming commercial construction activities are creating prospects for future equipment demand.

Hence, players in the industry are gradually shifting their focus on raising the heating and cooling capacity of their models, while decreasing their electricity consumption. Several OEMs are focusing on green initiatives to reduce greenhouse emissions and manufacturing cost. Therefore, in recent years, there has been a major thrust toward eco-friendly temperature-control units, which are those that consume less power and operate on renewable sources of electricity, thereby reducing costs.

Additionally, developing countries such as China, India, Indonesia, Thailand, Brazil, and Mexico, are witnessing significant economic growth, which has resulted in a rise in the purchasing power of middle-class families.

Therefore, to improve their foothold in the HVAC equipment market, various businesses are increasing their product range, by developing HVAC equipment with advanced technologies. Moreover, in recent years, the market has seen a number of developments geared at making systems not only more efficient but also more environment-friendly.

Increasing Preference for VRF Technology Increases HVAC Demand

The growing demand for energy-efficient temperature-control solutions is projected to drive the sales revenue from VRF systems with a CAGR of around 10% over this decade. The VRF technology can raise and bring down the temperature in different areas simultaneously. This it achieves by controlling the amount of refrigerant that is provided to the fan coil units located in a building. This technology provides several benefits, such as cost-effective installation, energy savings, and design flexibility.

The real estate market and regulatory environment are evolving, with sustainability having a considerable impact on the value, operating costs, and marketability of properties. Buildings that are environment-friendly and suit the requirements for health, safety, and comfort are becoming increasingly popular.

The environmental and financial implications of depending on fossil fuels and inefficient systems will increase as the focus on decarbonization and cleaner air rises. VRF systems heat and cool buildings more cleanly and efficiently than conventional thermal control technologies. Since they are completely powered by electricity, they allow for a reduction of operating costs and improvement of occupant comfort without the combustion of fossil fuels. This also allows building owners and managers to achieve sustainability and the now-prestigious green certifications.

Furthermore, the integration of IoT in HVAC systems is the major opportunity for appliance manufacturers. IoT helps in managing control systems, to collect data, which it stores in the cloud, as well as upgrading temperature control processes for improved efficiency and running a predictive maintenance plan.

IoT sensors, in particular, can help improve indoor air quality (IAQ). Constantly monitoring humidity, temperature, CO2, volatile organic compound (VOC), and noise levels can enhance the equipment’s comfort score, by pointing out issues that might harm work settings without immediate addressal, particularly in commercial facilities. As a result, IoT sensors are installed uniformly throughout facilities to track and control pollution levels and air quality.

This is why this technology is viable for several application areas, such as luxury apartments, retail stores, restaurants, and office spaces. The demand for it is, therefore, high in North America and Europe, attributed to the increasing adoption of building management solutions, which is leading to a rise in the usage of energy-efficient and advanced systems.

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Europe Continues To Extensively Use HVAC Systems and Services

The cold weather conditions in much of Europe have been a major driver for the rising demand for heating equipment, predominantly in Eastern Europe, where during winters, (November–February), the average temperature hovers between –6 degrees Celsius and 3 degrees Celsius. District heating meets around 9% of the European Union (EU) countries’ requirements, with heat pumps being majorly deployed in these facilities.

Due to the implementation of strict guidelines by the EU, energy-efficient HVAC systems are in high demand across industries. As the awareness regarding greenhouse gas emissions increases, the need for energy-efficient systems is also likely to rise. The impact of these factors on the demand for new-age temperature-control appliances is expected to be the most profound in the U.K., Germany, and France.

In Germany, the government is making concrete efforts to promote the adoption of efficient warming and cooling technologies powered by renewable energy. This has resulted in a considerable shift in the customer sentiment, which is, in turn, driving the heating and cooling industry in the nation.

Moreover, the government measures to achieve climate neutrality by 2050 are insufficient. The CDU Economic Council and German Housing Association are, therefore, looking to adopt decentralization, which will drive the heating equipment market in the coming years.

Growing Hospitality Industry Drives Market

The commercial sector, which continues to grow around the world due to the rampant construction in this space, is projected to have the largest share, over 40%, in 2030. For instance, hotel transaction volume across Europe reached just over $6.87 billion during the first six months of 2022. With almost $1.98 billion of transacted value, the U.K. remained the most-active country in Europe from the point of hotel investments during the first half of 2022.

Additionally, with about $730 million of transaction value during H1 2022, Germany stands among the top five most-active marketplaces in Europe. Overall, the top five hospitality hubs in H1 2022 (the U.K., Spain, Italy, France, and Germany) accounted for about 81% of the transacted value, compared to 68% in H1 2021.

Moreover, due to the presence of several historical sites and heritage places, APAC is one of the most-famous tourist destinations; moreover, it is less expensive than those in North America and Europe. Further, many countries are revoking the travel restrictions imposed during the pandemic and promoting tourism.

For instance, Thailand’s government plans to revise immigration rules, to make it convenient for long-term tourists to stay in the country, as part of a strategy to boost tourism investment and revenue once the pandemic eases. Similarly, the Philippines is famous for its pristine, white beaches. With the easing of travel restrictions, over 100,000 fully vaccinated tourists arrived in the country from visa-free countries in March 2022.

South Korea is also a popular destination among tourists, recording 3 million tourists in 2020, ranking 58th in the world in absolute terms. The tourism industry alone brought in roughly $11.78 billion to South Korea. This amounts to 0.72% of the country's GDP and around 36% of all international tourism receipts in East Asia.

APAC Makes Largest Contribution to Global Revenue Generation

The sales revenue in APAC is predicted to reach $170 billion by the end of 2030. The rising average temperature, mainly in India, China, Japan, South Korea, and Indonesia, is expected to support the growth. Due to the hot climate in much of APAC, the need for air conditioning equipment is more here compared to North America and Europe.

Moreover, the growing construction sector in APAC, chiefly India and China, is expected to propel the market in the region. Furthermore, the rising count of construction projects in the region, brings big growth opportunities for the players, especially in China, which will witness a CAGR of around 6%. Some major construction projects underway in the People’s Republic are Shanghai Chip Manufacturing Plant (expected to be completed in 2024), Foshan Metro Line 4 (expected to be completed in 2026), and Jingcheng Wafer and Integrated Circuit Packaging Plant (expected to be completed in 2024).

The growth in the APAC construction sector can be attributed to the increasing population and rising disposable income. China accounts for the highest population in the APAC region, followed by India and Indonesia. As of October 2022, China’s population stood at 1.45 billion, followed by India, with a population of 1.38 billion. The rising average temperature and the need to accommodate the increasing population are driving the demand for such appliances.

Additionally, the growing tourism industry is expected to boost the equipment and service demand, as government bodies and organizations are promoting tourism in order to attract foreign exchange and promote their native cultures.

Medical tourism is also trending in APAC, as regional countries offer cost-effective healthcare services. Moreover, the region is a hotbed for major sports events, which draw a large number of sportspersons and fans from across the globe, thus leading to the growth in the number of hotels. These factors are leading to commercialization on a massive scale, which will drive HVAC usage.

Key Players in Global HVAC Systems & Services Market Are:

• Johnson Controls International plc
• Trane Technologies plc
• Carrier Global Corporation
• Daikin Industries Ltd.
• Samsung Electronics Co. Ltd.
• LG Electronics Inc.
• Gree Electric Appliances Inc. of Zhuhai
• Midea Group Co. Ltd.
• Danfoss A/S
• Lennox International Inc.

Global HVAC Systems & Services Market Size Breakdown by Segment

The study offers a comprehensive market segmentation analysis along with market estimation for the period 2017-2030.

Based on Offering

• Equipment
  • By component
    • HVAC machine controllers
    • Energy meters
    • Drives
    • Contactors
    • HMIs/displays
  • By type
    • Heating
      • Furnaces
      • Heat pumps
      • Boilers
      • Unitary heaters
    • Ventilation
      • Humidifiers/dehumidifiers
      • Air cleaners
      • Ventilation fans
      • Air handling units and fan coil units
    • Air conditioning
      • Variable refrigerant flow
      • Ducted splits/packaged units
      • Split units
      • Chillers
      • Room ACs
• Services
  • Installation
  • Upgradation/replacement
  • Maintenance and repair
  • Consulting

Based on End User

• Commercial
  • Office buildings
  • Supermarkets/hypermarkets
  • Government
  • Healthcare
  • Hospitality
  • Transportation
• Industrial
  • Oil and gas
  • Food and beverage
  • Automotive
  • Energy and utilities
• Residential

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Russia
• Asia-Pacific
  • China
  • India
  • Japan
  • South Korea
  • Indonesia
  • Malaysia
  • Thailand
  • Vietnam
  • Taiwan
  • Philippines
• Latin America
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa
  • Saudi Arabia
  • U.A.E.
  • Kuwait
  • Qatar
  • Nigeria
  • South Africa
  • Egypt
  • Oman
  • Bahrain
  • Israel
  • Turkey