T
he North American HVACR market is mature, driven by the need for energy efficiency and integrated solutions. Reflecting this, Eric Gordon, International Sales Manager at Carlisle, says that it is an expansive and inclusive market, with many different sub-markets. To the best of his knowledge, the total size of the North American HVACR market is around USD 75 billion, with trade analysts expecting it to increase to USD 120 billion within the next five years. The unitary air conditioning segment shipments in the United Sates were a little over seven million pieces in 2015, reveals Frank Landwehr, Vice President - Marketing and Planning at Emerson Climate Technologies (Air Conditioning Business). He adds, “This number would include both residential and three-phase commercial unitary demand, along with export shipments of OEM systems.”
Conditioning the market Patrick Mulcahy, Director of Strategy, North America Building Efficiency, Johnson Controls, believes that the major demand drivers for the US market are new construction activities, replacement projects and regulations. He explains: “New construction projects have been increasing in both residential and commercial markets since the economic crisis in 2008. Replacement projects are a critical demand driver as the equipment lifespan can range from eight to 30 years, depending on the type of equipment, and customers can decide to replace aged and inefficient equipment for a payback on investment. Regulations also impact demand through new energy- efficiency standards, tax credits/financial incentives and enablement of equipment
Keeping initial cost to a minimum, while maintaining certain minimum quality standards with familiar brands is an overarching market philosophy
Eric Gordon
Frank Landwehr
Patrick Mulcahy
Juliet Pagliaro Herman
John Gibbons
retrofits.” Gordon adds that in its line of work, his company has observed a heavy push for energy-efficient duct systems, improved Indoor Air Quality (IAQ) and improved occupant thermal comfort from building owners as well as consultants and engineers. “Building codes requiring sealing and a pressure test verification of the sealed duct system are important factors that drive demand for our products, and they are also key in making the general public aware of how important a sealed duct system is,” he reveals. “Another major demand driver,” he adds, “is the push to make existing homes and commercial buildings more energy efficient, and a retrofit duct sealing is an easy way to really move the savings needle.” Landwehr makes an analytical prediction for the year ahead: “The macroeconomic indicators in the United States remain favourable for the air conditioning industry as the recovery in housing starts and other general indicators are expected to continue on the current favourable trend into 2016. This, combined with the currently low inventory levels in the channel, suggests that 2016 should show continued positive growth.”
The freezing point
Dan Coday
Although there are several demand drivers, Dan Coday, Sales Manager - Offshore FRP and Concrete Towers,
at Tower Tech, says that they vary by customer and project when it comes to purchasing new equipment. He cites examples: “Keeping initial cost to a minimum, while maintaining certain minimum quality standards with familiar brands is an overarching market philosophy. Long-term owneroperators, such as hospitals and universities, are quicker to make a return on investment, and low lifecycle cost is a key component in their decisionmaking for new equipment. LEED certification is raising awareness of low lifecycle cost and environmental impact. Nevertheless, the market is looking for a return on investment of typically no more than three years nowadays, for premium products and services. Shorter term owners, like commercial developers that are likely to sell the property within the next several years, often put more weight on the lowest installed cost possible for equipment.” Another challenge, says Landwehr, is regulations, and explains, “The unitary air conditioning segment in the United States features some of the highest efficiency standards in the world, for both residential and commercial applications, and these continue to present some of the greatest challenges for our industry. In 2015, the US Department of Energy (DOE) implemented an increase in the minimum allowable efficiency SEER (Seasonal Energy Efficiency Rating) for residential units, going from 13 SEER to 14 SEER for the south and southwest DOE regions. Also, commercial
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