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World HVAC equipment demand to reach US$110 billion in the year 2006. (News Release).

World demand for heating, ventilation and air conditioning (HVAC) equipment is projected to increase nearly 5 percent per year (including price increases) through 2006, reaching $110 billion. Particularly favorable prospects will be found in the Asia/Pacific region (excluding Japan), where ongoing industrialization and rising personal incomes will provide opportunities for suppliers. The Asia/Pacific region will benefit from above-average capital investment growth and healthy gains in the number of households. China, already the second largest market in the region, is expected to continue to post strong growth. Latin America will also provide favorable opportunities for HVAC suppliers, due to the ongoing industrialization and urbanization of the region. Above-average growth is also expected in the Africa/Mideast region. These and other trends are presented in World HVAC Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Heat transfer equipment will remain the largest segment, reaching $20.2 billion in the year 2006. Advances will result in large part from increasing capital investment. As capital investment levels accelerate, opportunities will result from rising construction expenditures, which will create demand for liquid chillers in both air conditioning and refrigeration applications. In addition, gains for products such as packaged terminal air conditioners will benefit from rising construction levels in the hotel industry, which is a major end user.

Room air conditioners are expected to exhibit above average gains through 2006 due to significant untapped market potential in numerous countries, especially in the developing regions. In addition, low ownership rates in the countries of Western Europe (relative to other industrialized nations such as the US and Japan) will present opportunities. Gains for motor vehicle air conditioners will benefit from accelerating global motor vehicle production, as well as from rising installation rates, especially in Western Europe.

Regulatory concerns will continue to play a significant role in the industry. The ongoing global phaseout of chlorofluorocarbons (CFCs), and subsequently hydrochlorofluorocarbons (HCFCs), used as the refrigerant in most systems has led manufacturers to seek out new refrigerants. Government efficiency standards, such as the US Department of Energy's Seasonal Energy Efficient Ratio (SEER) standards for central air conditioners and heat pumps, also are driving manufacturers to develop new products.

World HVAC Equipment (published 05/2002, 288 pages) is available for $4,600 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484 or e-mail Information may also be obtained through
(billion US dollars)

 % Annual Growth
Item 1996 2001 2006 01/96 06/01

World HVAC Equipment 72.7 87.2 110.0 3.7 4.8
 North America 24.9 29.9 35.3 3.8 3.4
 Western Europe 14.1 18.8 22.8 5.9 4.0
 China 4.4 7.3 12.6 10.9 11.5
 Japan 11.2 11.0 12.0 -0.5 1.8
 Other Asia/Pacific 8.9 9.5 13.6 1.5 7.4
 Other World 9.2 10.7 13.7 3.0 5.1

[c] 2002 by The Freedonia Group, Inc.
COPYRIGHT 2002 Subscription: $00.00 per year as of 1/94. Published irregularly. Contact Freedonia Group, 3570 Warrensville Cente
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002 Gale, Cengage Learning. All rights reserved.

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Publication:Research Studies - Freedonia Group
Geographic Code:00WOR
Date:May 14, 2002
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