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The HVAC market size is estimated to increase by USD 74.02 billion, at a CAGR of 6.5% between 2023 and 2028. The growth rate of the market hinges on various factors, notably the expansion of the construction sector, spurred by urbanization and infrastructure development. Additionally, there is a notable uptick in the preference for boilers, driven by their superior efficiency and environmental benefits. Moreover, the surge in refurbishment and replacement demand, influenced by technological advancements and regulatory requirements, contributes significantly to the demand for industrial HVAC as well as HVAC control systems. These factors collectively shape the trajectory of the HVAC industry, driving innovation and fostering opportunities for stakeholders across the value chain.
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The HVAC market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The HVAC equipment segment will account for a major share of the market's growth during the forecast period.?The growing population and industrialization, the rise in construction expenditure, growing adoption of commercial HVAC, increase in sales of commercial and residential buildings, and the augmented disposable income of the middle-class population are driving the market. Furthermore, the increase in demand for the equipment from the residential and non-residential sectors will drive the market.
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The HVAC equipment segment was valued at USD 106.96 billion in 2018. The growing population and industrialization, the rise in construction expenditure, the increase in sales of commercial and residential buildings, and the augmented disposable income of the middle-class population are driving the market. Heat pumps, air-conditioners (ACs) in rooms, and unitary ACs are likely to witness significant demand in both residential and non-residential buildings.
Non-residential end-users of Heating, Ventilation, and Air Conditioning equipment are manufacturing facilities, commercial and industrial buildings, retail stores, and healthcare and educational institutions. An increase in the construction of these end-users will drive the growth of the global System Market. HVAC systems, in conjunction with the entire building design, will help significantly reduce energy consumption. Buildings can save nearly 30% of the total energy cost annually by incorporating high-performance systems.
Furthermore, various builders prefer to promote green buildings as a means of differentiation to cope with intense competition in the market. Owing to the adoption of green technology, the demand for units has increased simultaneously as they help in energy savings. The rise in the number of net-zero buildings is the major trend in the construction business. A net-zero building can produce renewable energy to meet its annual energy consumption requirements. This reduces the need for non-renewable energy in the building. The commercial sector has seen growth in terms of the increasing number of office buildings, data centers, and healthcare facilities. Such factors will increase the market growth during the forecast period.
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APAC is estimated to contribute 53% to the growth by 2028. Technavio's analysts have elaborately explained the regional market trends and analysis, drivers, and challenges that are expected to shape the market during the forecast period. APAC is the largest market for Heating, Ventilation, and Air Conditioning due to the growing population, climatic conditions, increasing urbanization, and demographic changes in the region. The expanding commercial construction sector is the key driving factor for market growth in countries such as China and India. Regulations and efficiency norms in countries such as India and China will drive the Heating, Ventilation, and Air Conditioning Market in APAC during the forecast period.
Furthermore, an increase in the number of urban high-rise condominium projects will propel the demand for systems. Expansive construction projects in Australia, such as the Queen's Wharf, Howard Smith Wharves, and other significant urban development projects, will propel the demand for systems. The Queen's Wharf will accommodate five major premium hotels, three residential towers, large departmental stores, food and beverage outlets, a Queensland hotel, and other related buildings. Hence, all these projects require Heating, Ventilation, and Air Conditioning systems, thereby driving the growth of the regional market.
The market is at the forefront of innovation, responding to the evolving demands of climate control technologies amidst climatic changes. With a focus on efficiency, the Seasonal Coefficient of Performance drives the development of energy-saving products such as commercial air conditioners for both residential and commercial sectors, promoting affordable housing units without compromising comfort. Ground-source heat pump installations harness renewable energy, while A2L refrigerants like R-410 pave the way for environmentally friendly solutions, in compliance with HVAC regulations such as SEER2. Integration of AI-based smart voice-controlled technology enhances user experience in smart building solutions, featuring ductless HVAC systems and sustainable HVAC systems. From traditional AC units to advanced smart Heating, Ventilation, and Air Conditioning systems and furnace or boiler systems, the market continues to revolutionize climate control.
The construction sector plays a major role in driving the demand for air conditioning. With the increase in the construction of commercial and residential buildings, the demand for equipment and services has been increasing, thereby driving the growth of the market during the forecast period. Furthermore, ductless systems are highly efficient and flexible. Ductless systems are highly applicable in residential buildings. Most of the countries in APAC prefer ductless air conditioning as it is more economical and consumes less energy than central air conditioning for the residential sector. Ductless systems can be used to heat and cool the entire house or installed in new room additions, individual rooms, or basements to ensure zoned solutions. Mini split ACs can either be installed in ceilings, walls, or flooring. Such development is expected to drive market growth and trends during the forecast period.
BASs, which control and monitor other facilities of a given building, are embedded with computing and digital communication tools that allow these systems to enhance energy efficiency. The number of integrated BAS installations has increased owing to the rise in the number of construction projects and building retrofits.
Moreover, the energy efficiency ensured by the ever-improving BAS technology enables building owners to enhance facility management with integrated user-friendly solutions. The integration of HVAC controls with access control technologies is one such example. Such benefits are expected to propel the growth of the global market during the forecast period.
The units used in the residential and non-residential segments are made up of various components for the heating and cooling systems. These systems, including residential HVAC, have evolved in the past years to include more software-based and electrical components, along with numerous mechanical components that are necessary for cooling or heat transfer. Due to the increase in the number of components in a unit, the chances of any of these parts failing have also increased.
Thus, failure issues in equipment can lead to an increase in the operating cost of end-users and will encourage them to opt for substitutes, thus impacting the demand for equipment, and hindering the growth of the market during the forecast period.
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.
We also have detailed analyses of the market's competitive landscape and offer information on 20 market companies, including:
Air Comfort, Alexander Mechanical Inc., Blue Star Ltd., Carrier Global Corp., Daikin Industries Ltd., EMCOR Group Inc., Emerson Electric Co., ENGIE SA, Ferguson plc, Fujitsu Ltd., Ingersoll Rand Inc., J and J Air Conditioning, Johnson Controls International Plc, Lennox International Inc., LG Electronics Inc., Nortek, Samsung Electronics Co. Ltd., Service Logic, and Siemens AG
Technavio's HVAC market research and growth report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The market analysis and report classify 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.
The HVAC market is witnessing unprecedented growth driven by factors like population growth and increasing awareness of indoor air quality. Innovations like programmable thermostats and Internet of Things integration are revolutionizing control systems, while VRF systems offer efficient climate management in commercial infrastructure. Compliance with energy efficiency requirements such as SEER2 regulation is facilitated by eco-friendly refrigerants like R-410 and A2L variants. AI-based automated solutions and IoT sensors, Furnace systems optimize performance and ensure thermal comfort in buildings, contributing to LEED certification and sustainable practices. From heat pump equipment to air purifiers, both residential and commercial Heating, Ventilation, and Air Conditioning systems are embracing energy-efficient and environmentally friendly solutions. With a focus on smart and connected systems, the HVAC market continues to shape modern building practices while mitigating its environmental impact.
In addition, innovations such as Variable Refrigerant Flow (VRF) systems and ductless mini-split systems cater to both the residential segment and commercial buildings, meeting the stringent requirements of modern building codes. Utilizing R-410 and A2L refrigerants ensures environmental compliance while HEPA filters and air filters maintain indoor air quality. Integration of Internet of Things sensors enables remote monitoring and control, while AI-based smart voice-controlled systems enhance user experience. With a focus on cooling segment solutions and adapting to new constructions and retrofit segments in the real estate market, the HVAC industry continues to prioritize energy-efficient practices and the adoption of sustainable technologies.
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Market Scope |
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Market Report Coverage |
Details |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.5% |
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Market Growth 2024-2028 |
USD 74.02 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.93 |
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Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 53% |
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Key countries |
US, China, Japan, Germany, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ABM Industries Inc., Air Comfort, Alexander Mechanical Inc., Blue Star Ltd., Carrier Global Corp., Daikin Industries Ltd., EMCOR Group Inc., Emerson Electric Co., ENGIE SA, Ferguson plc, Fujitsu Ltd., Ingersoll Rand Inc., J and J Air Conditioning, Johnson Controls International Plc, Lennox International Inc., LG Electronics Inc., Nortek, Samsung Electronics Co. Ltd., Service Logic, and Siemens AG |
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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. |
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Customization purview |
If our HVAC market growth and forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this HVAC market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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