Growth in 2025 Global AC Market, Despite Mixed Regional Performances
Highlights from BSRIA’s 2025 Mid-Year AC Report
At a global level, sales are forecast to continue an upward trend, and 2025 is expected to close showing an overall increase of 3.7% in growth compared to the previous year. However, while demand for cooling has grown worldwide, this growth is uneven, largely due to economic uncertainty and regulatory disruption.
Regional Growth Powered by Climate and Development
Regional dynamics paint a diverse picture impacted by climate driven volatility, energy efficiency policies, refrigerant transitions, and intensified global competition.
The Middle East emerged as a major growth centre with expansion driven by mega projects, urbanisation, and record temperatures. In the UAE, specifically, the chiller market expanded strongly with growth of 15% for screw chillers, 14% for scroll units, and 9% for centrifugal chillers, fuelled by real estate development, tourism infrastructure, and district cooling networks.
In Asia, Japan saw sales volumes reach new highs following record-breaking heatwaves, with Japan’s ageing residential infrastructure driving demand for HVAC system upgrades. This climate-driven demand was replicated in other regions, such as South America, where Brazil experienced the second-hottest summer on record this year, boosting demand across the country.
Meanwhile in India, after a record 2024, overstocking and milder early weather slowed sales in 2025. However, the country’s fundamentals are unmatched with 90% of single-split purchases made by first-time buyers, and 60% of all new single-split air conditioners sold using inverter technology, which is more efficient and helps users to save on electricity bills.
In Europe, Germany's AC market is expanding, with split system sales increasing by 20%, driven by residential adoption and government heat pump incentives. Spain is also outperforming with 14% chiller market growth, fuelled by tourism, healthcare investment, and a doubling data centre pipeline.
Data Centres: The most powerful growth driver
Data centres have emerged as the foremost contributing factor reshaping the global chiller market, with total sales expected to reach USD11.6 billion in 2025, representing a 4.3% increase from 2024.
The impact is global. Japan has approximately ten data centre projects in development with a total capacity of up to 600 MW, including a 150 MW facility from SoftBank and another 150 MW project from SoftBank and OpenAI.
Additionally in the UAE, Khazna's 100 MW AI-optimised data centre is anchoring market expansion, while continued data centre growth in the US, alongside semiconductor and electric vehicle manufacturing, continues to drive robust chiller sales.
Looking ahead
While the report demonstrates that short-term volatility remains, particularly in markets adjusting to regulatory changes, the core drivers of urbanisation, digitalisation, and sustainability continue to suggest strong growth potential in the coming years.
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