BSRIA research indicates that the value of US market for packaged air conditioning solutions rose by more than 14% in 2018 to reach USD 20.4 billion. This is confirmed by BSRIA’s newly published market study “Room, packaged, unitary and furnaces air conditioning study”.
The figure includes the combined sales for windows/through the wall units, PTAC, Moveables, Minisplits, VRF, Roof tops, Indoor packaged, US style ducted splits, Evaporative coils (including those with blower), Furnaces and Close control units.
The market’s growth saw an increase of more than 6% in volumes, although prices increased above this level, driven by warm weather and a relatively healthy US economy and the residential sector benefitted from continued consumer confidence.
BSRIA estimates that 2019 will see further growth of just under 4% in terms of volume but over 8% in terms of value, to exceed USD 22 billion this year. VRF will continue to see strong growth and although small compared to the overall AC sales it continues to be the 4th largest VRF market in the world., albeit still from a low base, while mini splits will again grow in double digits. In contrast PTAC are forecast to decline in volume, but is still set to reach USD 379 million by 2023.
US style ducted splits still dominate, but growth is modest at around 3%, whilst the minisplits market remains small at less than 10% of the US ducted splits market in terms of volume, but still expected to see double digit growth.
The rooftop market is relatively mature and is expected to see modest volume growth with a CAGR to 2023 of less than 3%. Nevertheless, the US still account for 90% of rooftops sold in the world.
The ongoing trade disputes, notably with China are raising the spectre of higher tariffs which could increase prices of imported units. However, demand for more sophisticated products, including smart controls and IoT functionality could also increase purchase prices.
The impending replacement of R4210a refrigerants is also raising questions about the most appropriate replacement. Currently, there is no clarity regarding the regulatory policies regarding the replacements.
With political opinion becoming increasingly polarised in the US, attitudes to climate change and how to respond to it are one of the key points of contention between Republicans and Democrats. The outcome of the 2020 Presidential election could therefore have a big impact on the regulatory environment for air conditioning as an energy-hungry sector. At the same time, regulatory policies pursued at state level will continue to have an important impact, and these vary considerably depending on the party in control and their priorities.
Despite the progressive convergence of the market for ductless, ducted and packaged systems towards smarter and integrated solutions, the vast room AC market will remain resilient in the US. The market for window units, almost phased out in other parts of the world, are still mainstream in the US ,due to construction and specification practices.
Efficiency, greener products, smart revolution and convergence of technologies have been the main drivers in the air conditioning market in the USA in the past five years.
With US average electricity prices less than half the European average, saving money on energy bills has not been a high priority for US consumers except in selected States such as California and the North East. The relatively long payback period for more energy efficient AC systems is a disincentive for consumers, for whom “smarter” features such as connected access and voice control can be more appealing. However, the commercial AC market appears to be more responsive to energy savings.
Connected features including remote control and monitoring are increasingly valued. For commercial AC solutions these can provide improved resilience and a reduction in service and maintenance costs. However, this tends to apply most to more expensive and business critical AC systems.
Future growth will depend very much on the health of the US economy and also on the political agenda regarding energy policy and also trade and tariffs, which emerges from the 2020 elections.
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