Heating and Air Conditioning in the US Industry Market Research Report from IBISWorld has Been Updated

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Though revenue from new installations slowed during the recession when construction levels fell, steady demand for maintenance and repair services kept the Heating and Air Conditioning industry running; additionally, government initiatives to reduce energy consumption will promote installations of newer, more energy-efficient units, further increasing industry demand. For these reasons, industry research firm IBISWorld has updated a report on the Heating and Air Conditioning industry in its growing industry report collection.

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The recovering real estate market will drive demand for HVAC services

The Heating and Air Conditioning industry is heavily influenced by activity in the construction market, with the majority of industry income generated from heating, ventilation and air-conditioning (HVAC) installations in new residential and nonresidential structures. “Maintaining, monitoring and repairing existing equipment also accounts for a significant share of revenue, lending the industry some stability in the face of the volatile new construction markets of recent years,” according to IBISWorld industry analyst Matthew MacFarland. These service segments also make it susceptible to changes in levels of disposable income. In the five years to 2013, industry revenue is expected to fall at an annualized rate of 1.3% to $57.3 billion.

The total collapse of the housing market and subsequent economic recession caused new construction activity to decrease dramatically, driving down revenue for the Heating and Air Conditioning industry. “During much of the five years to 2013, demand for new housing was hampered by an oversupply of existing homes, a growing number of home mortgage foreclosures and declining property values,” says MacFarland. Nonresidential building construction activity also declined as the recession caused a contraction in the business sector. As unemployment rose and businesses reduced operations, more vacancies in commercial buildings appeared and demand for new nonresidential structures weakened. These factors hurt demand for HVAC installations across all construction markets.

The Heating and Air Conditioning industry has a low level of concentration, as the majority of industry operators are smaller firms that specialize in specific regions or types of HVAC systems. According to the US Census and IBISWorld estimates, more than half of enterprises in the industry employ one to four people and a significant portion are self-employed contractors. The industry’s low concentration will likely continue in the five years to 2018. Additional firms are expected to enter the market as the construction sector improves, but most of these operators will be small firms and nonemployers, many of whome left the industry during the recent economic downturn.

After three years of declining revenue from 2008 to 2010, the industry turned a corner in 2011 and recorded strong 6.4% growth in 2012. Positive signs in the housing market, particularly in the first quarter of 2013, indicate the construction sector's burgeoning return to health. As more homes and commercial structures are built and require HVAC system installation, demand for industry technicians will grow strongly. Furthermore, national standards for energy efficiency and a growing trend toward lowering household and business energy use is projected to encourage building owners to upgrade to more efficient systems. With these positive trends in full swing, industry revenue is forecast increase to over the next five years.

For more information, visit IBISWorld’s Heating and Air Conditioning in the US industry report page.

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IBISWorld industry Report Key Topics

This industry consists of establishments that primarily install and service heating, ventilation, air-conditioning (HVAC) and refrigeration equipment. The work performed includes new installations, additions, alterations, maintenance and repairs. Plumbing and related activities are included in the Plumbing industry (IBISWorld report 23822b).

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com

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