HVAC Equipment Demand in Commercial Buildings to Reach $12.3 Billion in 2021

Posted on 10/24/2019

A new study from The Freedonia Group, a Cleveland-based industry research firm, found that demand for HVAC equipment in commercial buildings is projected to advance 3.3 percent per year through 2021 to $12.3 billion. Although larger than the residential market, commercial demand gains will increase at a slower rate due to an expected slowdown in commercial construction activity. Competition from used equipment will also restrain sales growth in this market. Still, opportunities for equipment sales will continue to be supported by the need to replace aging equipment.

The commercial market will represent 58 percent of all HVAC equipment sales, and will remain the larger market for two reasons:

  1. Commercial buildings often require more than one HVAC unit, boosting the total number of units installed and creating a large potential replacement market.
  2. Commercial HVAC equipment is generally more expensive than residential equipment.

The Total Outlook
U.S. demand for HVAC equipment in all markets is forecast to increase by 3.9 percent per year through 2021 to $21.2 billion. The majority of expected demand increases will come from the ongoing replacement of existing equipment. Shifts in the product mix toward more expensive HVAC equipment — such as away from room air conditioners to unitary air conditioners and from noncondensing cast iron boilers to condensing steel boilers — will provide further impetus to dollar gains.