WESTPORT, CT—Sales were up for HVACR manufacturers in 2018. That’s according to the latest AHR Expo and ASHRAE Journal Annual Economic Outlook Survey, released in advance of the Expo this month. Last year’s confidence in the industry’s economic outlook is forecasted to carry into 2019, with 87% of respondents anticipating positive business prospects heading into the new fiscal year.
The HVACR market is primed for business growth. Reports for 2018 are at an all-time high, with 44% of respondents reporting a significant sales increase of more than 10% year-on-year; this is up from the 2017 record of 35%.
“This is considerable data confirming the continued growth of our industry, even amongst market shifts and issues facing professionals,” said Clay Stevens, manager of AHR Expo. “It is further indication that the changing market has potential to grow in unexpected ways, and industry professionals need to stay abreast of the latest technologies and equipment available to them.”
Stevens said there are a number of contributors to the growth across all the areas of HVACR. “For example, there is an HVACR market shift toward more precise control of temperature, airflow, indoor air quality (IAQ), humidity management and cleanliness of our building environments,” he said. “Manufacturers are improving upon, as well as creating, new products and tech that meet this demand. There is also room for growth in the market with the introduction of deepened technology.”
Respondents expect to see steady growth across all market segments in the areas of residential; light commercial; heavy commercial; schools; non-school institutional buildings; office buildings; lodging; manufacturing/industrial; data/telecom centers; hospitals/healthcare; restaurants/hospitality; and laboratories/cleanrooms.
The fastest growth is forecast in the lodging sector with projections up 10% from last year, at 64%. “Lodging is an area that is embracing technology and what it can offer to HVAC,” he said. “Consumers are becoming more connected to their external environments and from that are able to more closely customize based on preference. HVACR systems are at the core of this with temperature and efficiency management.”
Overall sector growth predictions are up in comparison to last year as well, with positive outlooks across all markets at nearly 60% or better forecasts for excellent or good growth projections for 2019. “Across the globe, standards are changing, and the way buildings are constructed and networked is changing,” said Stevens. “We are seeing more intuitive technologies through IoT and AI technologies. Today’s market focuses on the whole-building system and how the sum of all parts inside interact to complete the job.”
Those more intuitive technologies include allowing the user to control the temperature with his or her mobile phone, and building pre-sets based on usage throughout the 24-hour day. “With AI, buildings can even take on the ability to detect occupancy based on thermal and adjust accordingly,” he said. “This year at the AHR Expo, you’ll even see HVAC training done through virtual reality. Beyond that, manufacturers are challenging their designs in building their products.”
For the third year, the report shows a shift in potential market drivers, with retrofit and renovations taking the lead for 2019 at 36%—up nearly 10% from last year. Previous years saw prospects for new-construction, which was the highest rated in 2018, and maintenance and replacement in 2017.
Not surprisingly, reliability remains the most important customer requirement when making buying decisions. Responses indicate a steady rise in energy efficiency and IAQ as close second top-rated factors for purchase decision-making. Energy efficiency saw the most growth, up 6% to more than 96% of respondents ranking it important to very important in their considerations. This aligns with the responses for the most important trend or issue with potential impact for businesses in 2019—leading the charge is IoT and the rise of connected buildings as they relate to energy efficiency and smart control.
“Following global trends on environmental impacts, you can see this is an area of interest and concern in just about every market,” he said. “HVACR is in a key position to respond to this shift, and manufacturers are doing just that in new and exciting ways.”
Issues of concern reported by respondents echo those of the hotel industry: tariffs, slow growth in the job force and other economic factors. “Tariffs are of concern due to the high costs of shipping and a disruption in the way manufacturers conduct business,” said Stevens. “The job force relies on education in the trades, and there is concern that professionals aging out of HVAC are not being replenished at the pace needed to sustain the market. What’s good is that for the foreseeable future, the HVACR market is set to succeed.” HB