Market Trends of United States HVAC Equipment Industry
Residential Sector to be the Largest End User
- In the United States, the residential HVAC segment is set to experience significant growth. This surge is largely attributed to the country's varied climatic conditions, which demand a range of HVAC equipment.
- For example, the World Bank highlights the climatic diversity in the United States, from the tropical warmth of southern Florida and Hawaii to the frigid arctic conditions of Alaska. The continental United States showcases a pronounced temperature gradient, with southern coastal states averaging over 21°C annually, contrasting sharply with the cooler northern regions near the Canadian border. Seasonal temperature swings are notable, with differences reaching up to 50°C in the northern plains between summer and winter.
- The growing concerns over indoor air quality are driving the expansion of the HVAC market in the residential sector. In addition, various regional governments are promoting the adoption of high-efficiency HVAC equipment. They are doing this by enforcing laws to meet energy demands and introducing sales programs that offer air conditioners at discounted prices. By consistently updating the Energy Labelling Program to favor energy-efficient systems, these governments are fostering an environment conducive to the growth of the HVAC market.
- As construction activity rises, the smart home industry is witnessing consolidation. With energy consumption in buildings on the rise, IoT-enabled HVAC systems are gaining traction. These trends are fueling the growth of the heating, ventilation, and air conditioning market. The expanding residential construction sector is driving the demand for HVAC installations, catering to diverse needs like space heating, cooling, ventilation, and water heating.
- According to the US Census Bureau, Texas and Florida led the nation in 2023, issuing over 190,000 residential building permits. In contrast, Alaska and Rhode Island lagged behind, issuing the fewest permits of any state. Hence, the growing construction activities, along with the increasing consumer adoption of HVAC in the residential housing segment, are anticipated to drive opportunities in the studied market during the forecast period.
Understand The Key Trends Shaping This Market
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Southern States of the US to Hold Major Market Share
- The southern states of the United States are witnessing a burgeoning market influenced by the region's hot and humid climate, urbanization, and economic growth. With some of the nation's highest temperatures and extended hot seasons, HVAC systems have become indispensable in nearly every Southern home, ensuring consistent demand in the residential market. States such as Texas, Florida, Louisiana, and Georgia show a pronounced reliance on air conditioning systems.
- Texas, home to the nation's second-largest population at approximately 30 million, has seen a consistent uptick in home sales since 2012, culminating in 327,921 sales in 2023. Similarly, Florida, another populous state in the South, recorded 257,697 home sales in 2023, as per state realtor data. Both states are experiencing a significant surge in new home constructions, with Texas notably setting record growth rates. These housing developments are fueling the rising demand for HVAC systems.
- In March 2024, the head of the State Energy Conservation Office (SECO) announced that Texas would apply for USD 690 million in residential energy efficiency rebates. This funding backs two new programs introduced by the Inflation Reduction Act: Home Energy Rebates and Home Electrification and Appliance Rebates.
- The Home Energy Rebates program incentivizes projects like insulation and HVAC upgrades that reduce energy consumption. The rebate amount scales with energy savings: projects achieving a 20-35% reduction can receive up to USD 4,000, while those exceeding 35% can get up to USD 8,000. Such incentives are poised to boost the demand for HVAC systems significantly.
- According to the data provided by the US Census Bureau, in 2023, the Southern United States outpaced all other regions combined in new housing starts. The West followed as the second region, recording approximately 400,800 housing starts in 2021. Notably, the Northeast was the sole US region to see a rise in housing starts in 2022.
