The European AC market is expected to grow by 3.4% in 2019 in value, with all the countries in the region performing in a positive way, except for Turkey and the UK. The two largest AC markets in Europe, Italy and France are showing a remarkable expansion of 12% something unusual for a relatively mature market, while Spain and Germany progressed broadly in line with the regional average.
In Italy the market continued to be driven and dominated by single and multi-splits sales, resulting from a large residential market. Most Italian businesses and industries are small and medium-sized family owned businesses scattered around the northern part of the country, and the market is dominated by the below 100kW range. Weather conditions and stricter energy efficiency regulations are the main market drivers in Italy.
In France, in addition to hot weather conditions, a growing new-build residential market, the uptake of R32, and the need to replace the large installed base of electric radiators and old AC units, have boosted split sales by 15% in value terms. Turkey and UK (to a lesser extent) were the counterpoint to an otherwise healthy performance of the AC markets in Europe. The Turkish market is being affected by elections, military and political conflicts, all of which affected the Turkish Lira and boosted inflation.
In the UK, despite slowdown in construction building permits, the splits and VRF market have proved more resilient than had been hoped given the current poor economic environment. The residential sector is now reported to be driving sales of multi splits which are installed as a cheaper alternative to mini VRF. The chiller market is slowly falling by volume. The commercial market (offices) is reported to be performing poorly. Sales to hotels are not as strong as they were. The overall splits market is expected to grow by around 4% by volume, whereas the chillers market is expected to decline by around 3% in 2019.
One of the largest AC markets in the Middle East, Saudi Arabia, is expected to grow by volume around 2% but to contract by 3% in value while the UAE market remains flat. In Saudi Arabia the chiller market has been underperforming for several years and is currently affected by a lack of large private and public projects and a subdued construction sector. A similar situation occurs in UAE, where fluctuating oil prices affected government revenues, triggering a reduction in government spending and investment, impacting also on the construction sector. Splits sales remained flat while chiller sales dropped by 2% in volume.
India shows a remarkable performance. The country is expected to join the leading group of nations in terms of the number of AC units installed, with a rapidly expanding demand resulting a growing middle-class, increasing urbanisation rates and rising temperatures. Sales of splits are expected to rise by almost 10% in 2019, while the chiller market also expected to close the year with an increase of 7% by volume with industry, hospitality and transport infrastructure all being major factors.
BSRIA is a non-profit, member-based association, providing specialist services in construction and building services. More information at www.bsria.co.uk.
- Abdel Eljidi Abdel.Eljidi@bsria.co.uk +44 (0) 1344 465 645 (Sales)
- Saziye Dickson Saziye.Dickson@bsria.co.uk - +44 (0) 1344 465 600 (ACV&R Manager)