Slow winds for air-con in 2010

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After a volatile year, the global air-con market contracted by 11% compared to 2008, achieving US$63.2 billion in 2009. The market is expected to see a slow recovery in 2010, with an expected 5% growth rate by value, according to the Building Services Research and Information Association (BSRIA) of the UK.

Asia-Pacific remains the largest world region in terms of air-conditioning sales, accounting for 49% of the total market by value, followed by the Americas region and Europe. The Chinese market is not only the largest market in Asia, but also the biggest market by value in the world, representing approximately 66% of global air-conditioning units in terms of production in 2009, according to BSRIA.

This represents a 7% increase in production compared to 2008. The Japanese market follows closely after the market leader with a value of US$10.5 billion. The last year’s number two, the US market, became the third largest market with US$8.7 billion in 2009. The US market is expected to regain its second position in 2013, predicts BSRIA.

Europe was hit the hardest by the economic downturn in 2009, with the market declining 25% by value overall. The worst-affected markets were Turkey, UK, Russia, Poland, Italy, Greece, Germany and Spain. The UK economy is facing its longest recession on record with rising unemployment and weak investment levels, and the recovery is proving to be slower than expected.

The Russian economy has experienced its biggest annual fall in 15 years, shrinking by 7.9% in 2009, according to federal statistics. The sharp drop in energy prices has been blamed for the hit. The European market is expected to show the first signs of recovery this year, with around a 3% growth in value terms compared to the year before.

The residential/light commercial market was valued at US$46.2 billion, which includes windows, movables and split systems. Unducted mini-splits were the largest market segment in terms of value, accounting for some 67% of the market share.

Movables

The US has remained the world’s leading movables market, accounting for a quarter of global sales, although after several years of rapid growth, the market declined by 22% in 2009 in value terms.

Europe is the largest region for sales of movables, with Italy being the largest European market, accounting for 85 691 units in 2009, down 17% on 2008. This was due to a combination of a poor summer during 2009 and the economic downturn in major markets in Europe resulting in a massive drop in sales.

The extreme heat in the Middle East, Africa and most parts of India hampers the sales of movables units. This type of equipment does not provide sufficient cooling loads to cope with the extreme temperatures of these regions.

Window/Through the wall

The total Americas region is still the global market leader for window/through the wall systems, and was estimated to be 8.4 million units in 2009, a market decline of over 40% compared to 2008. The US continues to dominate this market, but has been hit hard by the recession and depressed residential market. India and Saudi Arabia are among the largest markets in the world, accounting for up to 48% of the total market in 2009.

Russia and other former CIS (Commonwealth of Independent States) countries remain the biggest markets in Europe for windows. The southern region of Russia accounts for over 90% of Russian sales, where less well-off citizens are situated. The country accounted for 52% of total European sales by volume in 2009. Increasingly these units are being sold through retail instead of traditional specialised air-conditioning suppliers, supplied as OEM products.

Splits

India is one of the few countries that experienced growth in 2009, with a 28% increase in unit sales, followed by Brazil, with a 14% growth. India continues to account for one-third of the total Middle East, Indian and African region, with 1.8 million mini-split systems sold in 2009. This market is expected to experience further buoyant growth of over 27% CAGR to 2013.

In terms of value, the unducted splits market is the largest market, with the total sales of splits amounting to US$31 billion in 2009, with a corresponding volume of 51.3 million units, representing a decrease of 9% by value and 6% by volume in 2009.

Despite being relatively recession-proof in many countries, the VRF market has also been hit by the economic crisis, and contracted by 8% in value terms in 2009. However, Europe was the only continent that faced declining sales values, which dropped by about 28%. The worst-affected among major markets in Europe were the UK market (the second-biggest market in Europe after Spain), which almost halved in size, followed by Russia, with a 40% drop, and others such as France, Germany and Spain (20%, 21% and 15% respectively.) Asia Pacific is by far the largest VRF market, representing 64% of global sales by value. Japan is the biggest manufacturing base of VRF systems, accounting for some 44% of the global production volume, reports BSRIA.

China continues to be the largest split market in the world, and also the biggest manufacturing base. However, US ducted-style split continues to be mainly a feature of the Americas and namely the US, with the total Americas region accounting for 85% by value of all global sales.

The global single packaged market declined by 14% in volume and 11% by value in 2009. The total Americas region accounts for over 60% of the global market in value terms, with the US market alone comprising over 53% of the global sales value. The global single packaged market is dominated by the rooftop sector, in both value and volume terms, representing 74% and 56% respectively.

The European single packaged market represents only 8% of the global market by value. Spain, Italy and France are the three major markets in Europe, representing over 60% of sales value in Europe. Over 75% of the rooftops and indoor packaged units were sold with heat pump applications in Spain. Due to limited commercial projects and competition from other products, these markets declined in Europe in 2009.

The Japanese market for indoor packaged systems represents the greatest share by value, with 35% of the global market. However, the US dominates the rooftop market, with a 6% share by value. The rooftop market and indoor packaged markets are expected to start showing the first signs of recovery this year, predicts BSRIA.

Chillers

The chiller market experienced a decline of 14% in value and 13% by volume in 2009. All segments have experienced contraction over the last year. The biggest market, the total Asia Pacific region, declined from US$2.8billion to US$2.5 billion.

There was a decline of 11% in the Middle East region. Iran and Saudi were the only growth areas in this region, as the recession made its impact felt, but at a less significant scale, outside Dubai. Due to the nature of construction and use of district cooling in many parts of the region, there is a strong emphasis on larger-capacity chillers above 500 kW in the region.

In 2010, the global market is expected to remain flat at best, with a 1% decrease in value terms. The Middle East Region is forecasted to show a speedier recovery, with around 3% growth rate in value terms compared to 2009. Reciprocating compressors continue to disappear from the majority of markets, with the trend moving towards scroll and screw compressors.

Airside

After an impressive 8% increase in 2008, the air-handling unit market declined by 15% in 2009 in value terms. The biggest market is Europe, accounting for 37% of the global market, or US$1.7billion in sales value, followed by the Americas at US$1.5 billion. The German market on its own accounts for 28% of European sales. There is a growing trend in Europe towards more complex and energy-efficient units with heat-recovery systems.

However, the growing pressure from the competition keeps the average prices low. Europe is also the biggest market for fan coils, representing a third of the world market in value terms; however, Asia Pacific accounts for 45% by volume. Unlike the European market, the concealed type of fan coil dominates the Asian market, accounting for 72% of the market volume. In the European market, Italy has the largest share of fan coil units sold, by around 33% by volume.

Statistical data was obtained from the World Market for Air Conditioning study. BSRIA is a test, instrumentation, research and consultancy organisation providing specialist services in construction and building.

For further information contact Tim Page on bsria@bsria.co.uk or visit its Web site at www.bsria.co.uk.