USA: VRF air conditioning shows further growth in the US market, as a new report estimates that total packaged AC sales rose by more than 14% in 2018 to reach $20.4bn.
These latest figures are revealed in a new study – Room, packaged, unitary and furnaces air conditioning – by UK market research company BSRIA. The figure includes the combined sales for windows/through the wall units, PTAC, moveables, minisplits, VRF, roof tops, indoor packaged, US style ducted splits, evaporative coils (including those with blower), furnaces and close control units.
In a separate study, BSRIA reports that the central plant air conditioning market in the US also rose in 2018, by around 6% to reach $3.2bn – the fourth consecutive year of growth.
Packaged air conditioning
While BSRIA reports a packaged air conditioning market growth of more than 6% in volumes, prices increased above this level, driven by warm weather, a relatively healthy US economy and continued consumer confidence in the residential sector.
BSRIA estimates that 2019 will see further growth of just under 4% in terms of volume but over 8% in terms of value, to exceed $22bn this year. VRF will continue to see strong growth and, although small compared to the overall AC sales, it continues to be the fourth largest VRF market in the world.
US-style ducted splits still dominate, but growth is modest at around 3%, whilst the minisplits market remains small at less than 10% of the US ducted splits market in terms of volume, but still expected to see double digit growth. In contrast PTAC sales are forecast to decline in volume, but are still set to reach $379m by 2023.
The rooftop market is relatively mature and is expected to see modest volume growth with a CAGR to 2023 of less than 3%. Nevertheless, the US still accounts for 90% of rooftops sold in the world.
BSRIA warns that ongoing trade disputes, notably with China, are raising the spectre of higher tariffs which could increase prices of imported units. However, it sees demand for more sophisticated products, including smart controls and IoT functionality, could also increase purchase prices.
With attitudes to climate change and how to respond to it being one of the key points of contention between the US political parties, BSRIA also sees the outcome of next year’s election being key to the regulatory environment for air conditioning as an energy-hungry sector.
BSRIA reports that efficiency, greener products, smart revolution and convergence of technologies have been the main drivers in the air conditioning market in the USA in the past five years. With US average electricity prices less than half the European average, saving money on energy bills has not been a high priority for US consumers except in selected States such as California and the North East. As a result, the relatively long payback period for more energy efficient AC systems is seen as a disincentive for consumers, for whom “smarter” features such as connected access and voice control can be more appealing. However, the commercial AC market appears to be more responsive to energy savings.
Central plant market
BSRIA research indicates that the value of US market for central plant air conditioning (chillers and airside products like AHUs, fan coils, VAVs and other terminal units) rose by around 6% in 2018 to reach $3.2bn – the fourth consecutive year of growth.
Growth across residential, commercial and industrial sectors in the US is being fuelled by higher efficiency, green products and technology convergence. BSRIA also observes that the majority of the demand is currently coming from replacement rather than new build projects.
The central plant market was no exception in 2018, expanding on the back of economic growth and increased investments in renovation and construction.
As expected for a mature market, growth generally did not exceed 5% in any of the product categories, but prices were under inflationary pressure resulting from the effects of the trade war between USA and China. Consequently, BSRIA sees AC prices continuing to rise over the next few years, also driven by a shift towards more energy efficient and sophisticated systems and the use of new refrigerants.
The smart revolution has made an impact on the commercial market, where the connectivity and data analytics is primarily used to reduce service and maintenance costs. Embedded monitoring devices are becoming a mainstream feature in commercial equipment.
Chiller sales showed “modest” increases in 2018 and volume sales are expected to remain fairly flat. Sales were propelled by higher efficiency systems, the use of new refrigerants and add-ons from suppliers, such as remote monitoring. Efficiency of existing systems are often improved by retrofitting a variable speed drive.
Similarly, BSRIA sees air handling units moving towards increasing fan motor efficiency, more controls and features to improve indoor air quality.
Fan coils were less affected by inflationary pressures, with energy efficiency through the use of EC fan motors and noise reduction the main trends.
The BSRIA report on air conditioning analyses the main trends underlying the US market with a deep dive into the demand evolution by product, segment, capacity, application and key components. Special focus is on the emergence of ductless in residential and light commercial, energy efficiency regulation and market forces, refrigerants, a fast-changing competitive landscape and outlook for the market within the next five years. With a combination of detailed market data and insightful analysis, the US AC BSRIA report is a unique tool for strategy planning available to all the businesses operating or planning to operate in this exiting market.
Find out more here.