Rising demand from contractors will ultimately increase revenue.
New York, NY (PRWEB) December 25, 2013
Revenue for the Heating and Air Conditioning Wholesaling industry has been volatile over the past five years, largely due to declines in residential and commercial construction and private spending on home improvements. “However, after substantial revenue losses in 2008 and 2009, the industry began to recover in 2010,” according to IBISWorld Industry Analyst Stephen Morea. Consequently, revenue is expected to continue growing through 2013 to total $32.0 billion. However, this increase is not enough to outpace recessionary declines and so industry revenue is expected to decrease by an annualized 1.2% in the five years to 2013.
New home construction, which is measured by the number of US housing starts, began its recovery in 2010. This growth accelerated in 2012, when housing starts jumped 29.0% and is expected to increase an additional 16.7% in 2013. “This is a crucial trend because many of these new residential structures will require heating or air conditioning equipment, boosting demand for the industry,” says Morea. Demand from commercial building contractors also improved after the recession and these companies will provide new work, additions and repairs to offices and other structures. As a vital downstream market for industry wholesalers, rising demand from contractors will ultimately increase revenue an expected 2.7% in 2013.
In the five years to 2018, rising employment and disposable incomes will boost homeowner's spending ability. This, in turn, will lead to stronger demand for home improvements, which includes upgrades in heating and air conditioning equipment. The enforcement of several environmental regulations will also aid industry growth. For example the Environmental Protection Agency's plans to eliminate hydrochlorofluorocarbons (HCFCs) includes a 90.0% reduction in HCFC product consumption and production by 2015. This ruling will spur heating and air-conditioning replacement demand because HCFCs often occur as leakage from cooling appliances. Other incentives such as tax rebates and savings associated with buying new, energy-efficient equipment, will help industry revenue increase by 2018.
For more information, visit IBISWorld’s Heating and Air Conditioning Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Wholesalers in this industry engage in buying, selling and distributing heating, ventilation and air conditioning (HVAC) equipment. This industry excludes in-room and in-window air conditioners (e.g. "swamp coolers," see IBISWorld report 42362) and hydronic equipment (see IBISWorld report 42372). Moreover, while installation is also excluded, service and repair work are part of this industry, accounting for less than 2.0% of industry revenue.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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