HVAC System Market Analysis APAC,Europe,North America,Middle East and Africa,South America - US,China,Japan,Germany,UK - Size and Forecast 2023-2027

Heating, Ventilation, and Cooling (HVAC) System Market Size 2023-2027

The Heating, Ventilation, and Cooling (HVAC) System Market size is forecast to increase by USD 48.34 billion at a CAGR of 6.22% between 2022 and 2027. The market's expansion is propelled by various factors, including the escalating demand for inverter HVAC systems renowned for their energy efficiency and cost-effectiveness. Furthermore, the rise in office absorption space drives the need for efficient climate control solutions to ensure comfort and productivity in commercial settings. Additionally, the growing preference for rental HVAC systems offers flexibility and cost savings to businesses seeking temporary or scalable cooling and heating solutions. As industries prioritize sustainability and operational efficiency, the adoption of advanced HVAC technologies becomes imperative, driving market growth. These trends underscore the evolving landscape of the market, characterized by a shift towards more sustainable and adaptable solutions to meet the diverse needs of businesses and consumers alike. 

Market Overview

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Market Segmentation

This report extensively covers market segmentation by end-user (non-residential and residential), type (split system, ductless system, and packaged system), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report consists of historic market data from 2017 to 2021.

Key Drivers, Trends, and Challenges

The market encompasses heating, ventilation, and air conditioning solutions for residential, commercial, and industrial buildings. With climatic changes increasingly impacting indoor environments, there is a growing demand for energy-efficient HVAC systems. Air conditioners, a significant component of HVAC systems, are being upgraded to smart systems that monitor and optimize energy consumption data. Air filters, essential for maintaining indoor air quality, are also becoming more advanced, filtering out not only dust but also moisture, smoke, heat, bacteria, and other pollutants. The adoption of hybrid heating and green building strategies in both affordable housing units and commercial infrastructure is driving the market's growth. It plays a crucial role in enhancing the standard of living and ensuring energy efficiency in various sectors. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. A holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.    

Key Market Driver

The growing demand for inverter HVAC systems is driving growth in the market growth. The market is experiencing significant growth due to several factors. Climatic changes and extreme weather conditions are major drivers, with India reporting its fifth hottest year in 2022. Increasing disposable income and improving the standard of living also contribute to the demand. The Indian government's investments in infrastructure development, including affordable housing units and commercial infrastructure, further boost the market. Energy consumption is a concern, leading to the popularity of energy-efficient solutions like smart HVAC systems, air filtration, UV C sterilization, and ventilation solutions.

Moreover, HVAC systems are essential for maintaining indoor air quality, controlling temperature, and managing moisture, smoke, heat, dust, bacteria, and carbon dioxide in residential, commercial, and industrial buildings. Energy efficiency, environmental regulations, and sustainability concerns are influencing the adoption of hydrofluoroolefins (HFOs) and other eco-friendly technologies. Heat pump equipment, air purifiers, and hybrid heating systems are also gaining popularity. The green building strategy emphasizes the importance of HVAC systems in creating sustainable and healthy environments. The increasing adoption of inverter split ACs, despite their high cost, is expected to have a positive impact on the global market share in terms of revenue during the forecast period.

Significant Trends

The increasing popularity of smart HVAC systems is a primary trend in the market growth. The market is experiencing growth due to the adoption of smart and connected systems in response to climatic changes and energy consumption concerns. Air conditioners are becoming more energy-efficient through the use of IoT-enabled devices, which collect and analyze data to optimize performance. Air filters and indoor air quality systems are essential components of HVAC systems, ensuring health and sustainability in residential and commercial buildings. Energy efficiency is a priority, with HVAC systems in affordable housing units, commercial infrastructure, and medical technologies adhering to environmental regulations and sustainability concerns.

Further, HFOs, air filtration, UV C sterilization, ventilation solutions, heat pump equipment, and air purifiers are key technologies in this market. Commercial HVAC systems employ hybrid heating and green building strategies to reduce energy consumption and improve temperature control. HVAC systems mitigate moisture, smoke, heat, dust, bacteria, and carbon dioxide pollutants, ensuring optimal conditions for occupants. Such factors are expected to positively impact the global market size during the forecast period.

Major Challenge

The lack of skilled labor is a major challenge hindering market growth. The market encompasses the manufacturing and servicing of advanced heating, ventilation, and air conditioning systems. Climatic changes and increasing energy consumption necessitate the use of efficient HVAC systems, including smart HVAC systems that provide energy consumption data and optimize indoor air quality. However, the shortage of skilled labor poses a significant challenge, as HVAC systems require specialized knowledge for installation and maintenance. This issue is particularly pressing in the context of residential building, commercial infrastructure, and industrial construction, where HVAC systems are essential for maintaining a standard of living, ensuring medical technologies function optimally, and adhering to environmental regulations.

Energy efficiency, air filtration, UV C sterilization, and ventilation solutions are key features of modern HVAC systems, addressing concerns related to moisture, smoke, heat, dust, bacteria, and carbon dioxide pollutants. The market also includes heat pump equipment, air purifiers, and commercial HVAC systems, which employ hybrid heating and green building strategies. Hydrofluoroolefins (HFOs) are increasingly used in place of traditional refrigerants to improve sustainability and address concerns related to their environmental impact. With the shortage of skilled personnel and increasing demand from end-users, the growth of the market size might slightly decline during the forecast period.

Customer Landscape

Our analysis of the adoption life cycle of the market research and growth indicates its movement between the innovator’s stage and the laggard’s stage. The report market focuses on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop market growth and forecasting strategies from 2022 to 2027. 

Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Carrier Global Corp. - The company offers HVAC systems such as Carrier Infinity.

Daikin Industries Ltd. - The company offers HVAC systems such as Daikin VRV.

Emerson Electric Co. - The company offers HVAC systems such as Emerson Sensi.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including:

• Danfoss AS 
• Furukawa Electric Co. Ltd.
• GREE Comfort
• Haier Smart Home Co. Ltd.
• Hitachi Ltd.
• Honeywell International Inc.
• Ingersoll Rand Inc.
• Johnson Controls International Plc
• Lennox International Inc.
• LG Corp.
• Midea Group Co. Ltd.
• Mitsubishi Electric Corp.
• Nortek
• Panasonic Holdings Corp.
• Samsung Electronics Co. Ltd.
• Trane Technologies Plc
• Whirlpool Corp.

Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Market Segmentation by End-user, Type, Geography 

End-user Segment Analysis:

The non-residential segment will account for a major share of the market's growth during the forecast period. The non-residential segment of the global market includes both commercial and industrial HVAC systems. This is the dominating segment in the market in focus and is expected to witness steady growth during the forecast period.  The growth of the construction sector, an increase in investment in infrastructure development, and the growing need for office space are major factors that have led to a rising market within the nonresidential segment.

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The non-residential segment was valued at USD 66.88 billion in 2017 and continued to grow until 2021. The growing number of start-ups, coupled with the increasing availability of co-working office spaces, are expected to propel the demand for HVAC systems. Demand for heating and air conditioning equipment is expected to be stimulated by the growing investments in infrastructure development, apart from increased office space. Such factors are expected to increase the demand for centralized split air conditioners (ACs), thereby driving the growth of the global market share in the non-residential segment during the forecast period.

Type Segment Analysis:

Based on the type, the market has been segmented into split systems, ductless systems, and packaged systems. The split system will account for the largest share of this segment. A split system consists of external and internal units. The major parts of external units are the condenser and the compressor. The split system segment of the global market includes both ductless and ducted systems. The use of an inverter split system, whereby the compressors are operated at a constant speed, has been driven by a growing awareness that energy consumption needs to be reduced. The focus on low energy consumption is also encouraging HVAC system manufacturers to expand their product portfolios in this segment by introducing inverter split ACs, especially in the residential segment. The demand for split systems is driven by an increase in the number of office premises and increased investment in infrastructure development. The ducted split ACs used in non-residential applications yield lower profits than those used in residential applications. Thus, to increase their profit margins, HVAC system manufacturers are increasingly focusing on the residential segment. 

Regional Analysis

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APAC is estimated to contribute 54% to the growth by 2027. Technavio’s analysts have elaborately explained the regional market trends, drivers, and challenges that are expected to shape the market during the forecast period.  The APAC region, characterized by urbanization and industrialization, experiences significant growth in the market. Factors such as population expansion in countries like China and India, with a population increase from 1.40 billion in 2017 to 1.41 billion in 2021 (World Bank), and climatic conditions driving the need for heating, ventilation, and air conditioning systems. Regulations and efficiency norms in countries like India and China will shape the market. HVAC systems include various fuel types like natural gas, heating oil, wood, and electrical cooling and heating systems. Energy expenditures and carbon emissions are concerns, leading to the adoption of green technologies, smart devices, and machine learning systems for building sustainability solutions. Oxygen is not directly related to the market. 

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments

• End-user Outlook
  • Non-residential
  • Residential

• Type Outlook 
  • Split system
  • Ductless system
  • Packaged system

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • South America
    • Brazil

Market Analyst Overview 

The market is a significant sector in the construction industry. HVAC systems are essential for maintaining comfortable indoor environments in both residential and commercial spaces. The market is driven by various factors, including increasing demand for energy efficiency and growing awareness of indoor air quality. The market is diverse, with various types of systems available, such as split systems, packaged systems, and VRF (Variable Refrigerant Flow) systems. These systems cater to different applications and requirements, making them suitable for various building types and sizes. Moreover, the market is witnessing the adoption of advanced technologies, such as the Internet of Things (IoT) and AI (Artificial Intelligence), to enhance system performance and efficiency.

Further, these technologies enable remote monitoring and control of HVAC systems, reducing energy consumption and maintenance costs. The market is also influenced by government regulations and initiatives aimed at promoting energy efficiency and reducing carbon emissions. For instance, the Energy Star program in the US and the Energy Performance of Buildings Directive in Europe encourage the adoption of energy-efficient HVAC systems. In conclusion, the market is a dynamic and growing sector, driven by factors such as increasing demand for energy efficiency, growing awareness of indoor air quality, and the adoption of advanced technologies. The market offers various types of systems to cater to different applications and requirements, making it an essential component of modern construction projects.

Market Scope
Report Coverage	Details
Page number	165
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.22%
Market growth 2023-2027	USD 48.34 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.65
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 54%
Key countries	US, China, Japan, Germany, and the UK
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	Carrier Global Corp., Daikin Industries Ltd., Danfoss AS, Emerson Electric Co., Furukawa Electric Co. Ltd., GREE Comfort, Haier Smart Home Co. Ltd., Hitachi Ltd., Honeywell International Inc., Ingersoll Rand Inc., Johnson Controls International Plc, Lennox International Inc., LG Corp., Midea Group Co. Ltd., Mitsubishi Electric Corp., Nortek, Panasonic Holdings Corp., Samsung Electronics Co. Ltd., Trane Technologies Plc, and Whirlpool Corp.
Market dynamics	Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, Europe, North America, Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of market companies

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