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Air conditioning - UK market reviewApril 2008

The UK air-conditioning market is changing. No longer is it a straight fight between fan-coils and chilled beams. Variable flow refrigerant systems are developing into various different guises, with roof-top units showing strong potential for growth. David Garwood presents the headline statistics.

Everybody, it seems, wants air conditioning. In 2006, BSRIA estimates that the total value of the UK air conditioning market was a little over £692 million. The market is thought to have risen further in 2007. But where are the trends heading?

The market in 2007
There was strong growth in demand during 2007 for new build and refurbishment of offices. Property developers took advantage of lower borrowing costs. Many manufacturers reported the growth in the market for central plant and packaged products to be positive as their clients were accelerating construction and refurbishment programmes.

However, with the rises in interest rates and the recent turmoil in the financial markets this is expected to change. It is now more difficult to fund the projects through acquisition of loans.

BSRIA expects a decline in new orders into 2008. There may be a swing towards refurbishment as opposed to new build, as budgets will be tighter.

Roof-top systems
The roof-top market experienced an increase in volume and value in 2006. The market has recovered to levels last seen in 2004. The increase is largely due to investment from the retail sector such as cinemas, and fast-food restaurants, which is bucking the trend in consumer spending.

In 2006, roof-top products became available above 200 kW. Together with other recent technology developments, this has allowed rooftop systems to start to penetrate the traditional chiller/air handling unit market. The rooftop product can perform all the requirements of these conventional systems in one box, so it will benefit from applications of low capacity and were plant space is limited.

Air handling units
The total market size for air handling units recovered in 2006 to the level last seen in 2004. The market grew by 13 percent in volume and 14 percent in value in 2006 over 2005. Modest growth is expected in 2007 as a number of manufacturers reported significant sales on the back of further growth in the UK construction industry, particularly in the office sector and the chiller market as a whole.

Close-control air-conditioning
Manufacturers and suppliers are currently experiencing high demand for close-control equipment, enabling companies to place a price premium on their products. The growth is being driven by a number of factors including:

  • USA and European accounting Directives
  • Development of virtualisation software
  • Online broadcasting and video streaming
  • High-density blade servers.

Growth is expected to decline after 2008, as there are a limited number of merchant banks and other end-users requiring data centres to be built. This will also affect increases in the average price in 2008 and beyond, when pressure on price is expected to be down.

Compressor technology
The market will continue to experience shifts in compressor type, refrigerant and size. There has also been growth in recent technologies such as the Turbocor and inverter screw-compressors.

Scroll compressors are continuing to erode the market share of screw and reciprocating chillers through further developments of larger capacity units with R410A refrigerant. But as with screw compressors, scroll compressors are facing increasing competition from VRF systems, especially in refurbishment projects.

Reciprocating chillers have lost significant market share. Many manufacturers are no longer including them within their portfolio and they now account for less than three percent of the market.

For more information contact Worldwide Market Intelligence at BSRIA:

Tel: +44 (0) 1344 465600
or email