Europe HVAC Market - Industry Outlook and Forecast 2020-2025

INDUSTRY INSIGHTS

The Europe HVAC market size to reach USD 78 billion by 2025, growing at a CAGR of 6% during the forecast period. The European heating, ventilation, and air conditioning (HVAC) market is expected to face volatility in the HVAC industry owing to various equipment it produces by sourcing raw materials from several low-cost countries, especially China. The supply chain aspect of the industry in Q1 & Q2 of 2020 was profoundly affected by the outbreak of the COVID-19 pandemic. The growth rates have been truncated on account of COVID-19. Taking into account the probable impact, the growth estimates are expected to be down by 2% to 3%. The growth estimates for the residential sector and small commercial sectors are also likely to be impacted. The challenges are majorly from the demand side, with a varying degree of demand fluctuation across countries. With the HVAC system being a major cost factor in buildings, constituting around 15% to 20%, the impact is expected to be severe in 2020. There is no uniformity in the demand across countries and depends on the fiscal stimulus, the containment of COVID-19 spread, and the recovery of the construction industry (new and refurbishment). 

SNIPPETS

• The heating segment is likely to achieve an incremental growth of over $10 billion by 2025. The growth can be attributed to growing innovations and high growth opportunities.
• The residential sector HVAC market to reach a revenue of over $45 billion by 2025.
• The UK HVAC market is expected to grow at the highest CAGR of over 8% during the period 2019–2025 on account of increasing government regulations to improve indoor air quality in residential, commercial, and industrial buildings.  

EUROPE HVAC MARKET SEGMENTATION

Europe HVAC research report includes a detailed segmentation by

• Equipment
• Application
• Geography     

INSIGHTS BY EQUIPMENT

The heating equipment market is characterized by intense competition. Heating products have witnessed high traction in colder climatic conditions of Europe. With a rapid rise in the requirement of more advanced heating equipment and less energy consumption, the market has seen an influx of Asia Pacific companies in the European market. The heat equipment segment is further categorized into heat pumps, furnace, and boiler units. Heat pumps are the major revenue generator for the heating market. The heat pump market is mainly strong in nuclear families, with a penetration rate of over 70%. Boilers have the highest demand in Europe. In terms of production and demand, the region is still one of the leading markets for high-efficiency boilers.

The European air conditioners market has been growing steadily in terms of value; however, the growth has remained stagnant. The long-term outlook for air conditioner demand in Europe is moderately positive, while the short-term outlook is adversely affected by the outbreak of the COVID-19 pandemic. France, Germany, Italy, the UK, and Spain are the largest demand generators in Europe and are expected to provide growth momentum during the forecast period. The demand for low-cost and highly efficient ACs with value-added features is likely to increase in Europe. The air conditioners segment is further segmented into RAC, CAC, chillers, and heat exchangers. The air conditioner segment is at a mature stage and has a vast addressable market in Eastern Europe. Germany and Italy are expected to witness faster growth for air conditioners on account of strong construction activities and a high volume of replacement demand in the long term.

INSIGHTS BY APPLICATION

Currently, the demand for HVAC systems from the residential sector is expected to be adversely affected by the COVID-19 outbreak. The new equipment and replacement demand are likely to be impacted, as consumers are looking to cut down on non-essential purchases. The residential HVAC market is likely to be truncated with growth rates witnessing a reduction. Air purifier filters are expected to face higher challenges, and also other products that are dependent on replacement demand more than new demand. The demand from Germany, France, UK, Russia, is also expected to witness challenging market conditions. However, post Q4 of 2020, the market is likely to pick up traction mainly driven by smaller countries with low impact of COVID-19. Although Nordic and Eastern Europe are less impacted, the recovery in the market conditions of Western Europe will have substantial bearings on the margins of the vendors in the HVAC industry.

The HVAC market end-users in the commercial sector are going through a rough phase concerning demand; hence their spending on HVAC modernization or service and maintenance is expected to decline by 2020. The renewal of contracts between service providers and customers is expected to be delayed and impacted by the HVAC market. However, post-2020, the market stabilization based on economic and financial stimulus is likely to be stable, although some countries will take more time for recovery. The European HVAC market is strong in Western Europe, where investment in infrastructure development is high. The market in Southern Europe is expected to grow decently without any steep uptrend or downtrend.

INSIGHTS BY GEOGRAPHY

Western Europe is currently facing several restraints on account of the uncertainty due to the COVID-19 crisis and strong lockdown measures. Italy, Germany, and the UK have strongly been impacted by the virus and are facing enormous economic challenges. Apart from the construction industry is profoundly affected by projects coming to a standstill, the replacement demand from existing buildings is also taken a hit. Air conditioning systems lead the Western Europe market as the temperature rises in urban cities on account of pollution, urbanization, and global warming. The application of HVAC systems in Germany is expected to be higher in non-residential units such as hospitals, public offices, and public utilities centers during the period 2020–2025.  In Germany, centralized air conditioning solutions are growing in demand by way of chillers and VRF systems. However, in many places, the VRF systems are replacing chillers. Moreover, the impact of COVID-19 during the Q1 2020 has increased safety concerns and demand for quality air among people in Germany.

INSIGHTS BY VENDORS

The Europe HVAC market before the outbreak of COVID-19 was going through a transition period, which was mainly on three fronts – regulations, technological upheaval, and construction industry rebound in many countries. In the post-COVID-19 outbreak, the industry is witnessing a financial turmoil. The need for efficient HVAC has increased in Europe primarily driven by EU directions, objectives, and targets on the same. This has also affected the consumer trends with awareness on HVAC equipment, which have low lifecycle costs fueling higher demand in the European HVAC market.

The Europe HVAC market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

Segmentation by Equipment 

• Heating
  • Heat Pump
  • Boiler Units
  • Furnaces
  • Others
• Air Conditioning
  • RAC
  • CAC
  • Chillers
  • Heat Exchangers
  • Others
• Ventilation
  • Air Handling Units
  • Air filters
  • Humidifiers & Dehumidifiers
  • Fan Coil Units
  • Others

 By Application

• Residential
• Commercial
  • Airports &Public
  • Office Spaces
  • Hospitality
  • Hospitals
  • Industrial & Others

 By Geography 

• Western Europe
  • UK
  • Germany
  • France
  • Italy
  • Netherlands
• Nordic
  • Norway
  • Denmark
  • Sweden
  • Others
• Central & Eastern Europe
  • Russia
  • Poland & Austria
  • Others