Air conditioning world
Growth to resume in air conditioning
The recently published BSRIA market intelligence study on the global air conditioning market shows that contraction slowed down in 2016 compared to the previous two years. Recent indicators show that growth is expected to resume in 2017 across many regions
T
he global AC market contracted by one per cent in value terms in 2016 and compared with a drop of five per cent in 2015, was not as bad as was initially expected. The Chinese market saw a late recovery supported by hot weather and the Government’s issue of a new five year plan, which boosted sales. Brazil and Saudi Arabia were the other main contributors to the negative growth. The global AC market was valued as US$92.6
billion, with packaged products accounting for almost 85 per cent of the value. The biggest packaged air conditioning market is
Asia Pacific accounting for some 60 per cent of the world market by volume. The market declined by one per cent in 2016, a lower figure than previously expected; positive developments in China in the second half of the year saved the market from falling further. The central plant markets performed poorly with
the exception of the Americas. The US, which is the second biggest central plant market, showed moderate growth. The slowdown in investments in industrial new construction and the low growth in healthcare and education restricted further market expansion. At the other end, the demand in the commercial office and hospitality verticals remained strong, leading to some growth. Continued pressures on the Brazilian economy took their toll in the air conditioning markets as the country experiences its worst recession on record. The Americas region contracted by five per cent in volume terms and reached nearly 27 million units in 2016. There was a real mixture of performances within the biggest markets in the region with the US, Canada and Mexico all showing strong growth while the Brazilian, (-46 per cent) and Argentinian markets (-15 per cent) plummeted. Political instability and economic downturn were the main reasons. The overall growth in the US air conditioning
market was promising at an increase of eight per cent in 2016. The growth was evident across all product areas bar the large packaged segment. Consumer spending, new construction activities, especially in the office, hospitality and retail markets, as well as low interest rates, were some of the main drivers in 2016. The European AC market grew by 13 per cent in 2016 after sluggish performance in the last few years. Economic recovery in most European countries
30 June 2017
Growth was evident in most of the large air conditioning markets apart from the UK
combined with the heat wave in southern Europe and replenishment of stocks resulted in a strong growth. Growth was evident in most of the large air
conditioning markets in Europe, apart from the UK. The vote to leave the European Union caused a lot of uncertainty and the British pound fell to its lowest in the last 31 years. Overall there was a lack of demand for office spaces and those projects which were near completion were also pushed back due to uncertainty about tenant demand, impacting on completion dates and consequently the purchase and installation of air conditioning. The MEIA region recorded a small decline in 2016 after two years of growth. The total air conditioning market was valued at just over 13 million units. The biggest market in the region was India which recorded an eight per cent growth but the Saudi market continued to suffer due to the lack of government investments and contracted by 25 per cent, bringing the whole region down by one per cent. The growth in India was driven by the rapid increase of penetration levels of air conditioning in the residential segment, soaring temperatures in May and a stable Rupee allowing better business planning and foreign direct investments.”
Moveables
Total sales of moveables for 2016 are estimated at some two million units representing an increase of 15 per cent compared to 2015, with a value of US$563 million. The US is the biggest moveables market, driven by favourable weather conditions and also availability of competitively priced units.
Windows / through the wall
The global windows / through the wall market dropped by two per cent in volume. The market reduced to almost 12 million units and US$2.4 billion in 2016. This product is becoming obsolete in many countries as splits products continue to take share.
Splits
Split systems represent the biggest segment of the world air conditioning market, comprising over 80 per cent of the market in volume terms. Among the splits, multi splits account for three per cent and VRF accounts for 14 per cent of the global market in 2016 in value terms. The total splits market has reached just over 100 million units, a one per cent drop compared with 2015, with a corresponding value of US$70 billion in 2016. China, the world’s biggest market, recorded a five per cent drop, restricting global growth. The highest growth markets among the key AC countries were South Korea (35 per cent), which benefitted from a hot summer, Vietnam (16 per cent), India (11 per cent) and the US (six per cent). The uptake of inverter technology accelerated
across many markets in 2016. The majority of Europe is now nearly 100 per cent inverter, with the exception of Russia where legislation does not encourage inverters and economic conditions means the market is dominated by low cost products.
Rooftops
The global rooftops market was estimated at around 1.2 million units with a corresponding value of around four billion units representing a one per cent drop compared to 2015 in volume terms. The US and Canada are by far the biggest two markets.
Central plant
The global chiller and airside market was valued as US$14.5 billion, representing a two per cent drop compared with 2015. Chillers represented some 50 per cent of the central plant market by value in 2016. The Americas region was the only continent that recorded any growth thanks to strong performance in the US market. Although economic growth is evident in many
regions, for the projects to get to the purchasing stage of building services is taking time and the market has continued to suffer from a lack of new commercial construction. The biggest region, Asia Pacific, accounts for 35 per
cent, followed by Europe with 26 per cent, the Americas 25 per cent and MEIA region 14 per cent.
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