A new report AMA Research points to increasing confidence in the AC and ventilation market, driven by the rising economy, legislation and air quality concerns. Andrew Gaved reports
The market for AC and ventilation is set to rise steadily over the next few years with a 10 per cent growth between now and 2019 according to AMA Research, a specialist trade analyst that tracks the construction industry and its allied sectors.
According to AMA, the market for air conditioning, ventilation and accessories was worth £1.07bn in 2014 at manufacturers’ selling prices, of which air conditioning comprises around £567m.
This steady growth – around 2 per cent a year, will mirror the general pickup in the economy and the attendant growth in construction, AMA believes.
But the researcher also notes that a perfect storm of legislation – the phase out of R22, the F-Gas directive and ErP directive – will play a part in driving sales of new more efficient and lower-GWP air conditioning.
This will see air conditioning grow quicker than the ventilation sector, expanding by 12.5 per cent over the next five years to £640m, AMA forecasts.
The growth is also subject to a number of other favourable factors, the analyst believes, ranging from a growing focus from building owners on improving Indoor Air Quality to changes to the Part L of the Building Regs, creating more air tightness, and of course rises in heat loads from computer use.
AMA points to the relatively wide range of end use applications as a supporting factor in the growth of the market.
With non domestic construction set to grow, albeit at a modest 2-5 per cent over the next four yesrs and the volatile housing market not influencing AC installations, air conditioning’s prospects are healthy, the analyst contends.
Indeed the office sector is forecast to grow in value by a dramatic 37.6 per cent between 2014 and 2019, providing a significant potential market for the AC sector.
Equally the industrial sector is pointed to as a key one for AC by the analyst, covering, as it does retail distribution and factories, where process cooling comes into its own. The industrial sector is forecast to grow by 25 per cent between 2014 and 2019, increasing by a not-insignificant £1bn to £5.1bn.
Another interesting statistic highlighted by AMA is the share of packaged AC units against central systems such as chillers and fan coil units. In 1994, it notes, the share was 58:42 in favour of the central systems, whereas 20 years on, the improved technology and ease of installation of the packaged units has seen the pendulum swing to 61:39 in their favour.
Among the other factors that the analyst points to as driving the market are two from opposing approaches – effectively carrot and stick.
Offering the stick approach is the CRC Energy Efficiency scheme (formerly carbon reduction commitment) which levies a fee based on carbon use on the bigger companies, while offering more of a carrot is the government initiative to roll out smart meters to all buildings by 2020.
This, AMA notes, could have the effect of prompting builder owners to monitor their energy use more closely, in turn leading to upgrade opportunities to more energy efficient air conditioning.
Interestingly the analyst doesn’t mention the Energy Performance of Buildings Directive, as a potential driver, although it does note the air conditioning inspection element.
As the likes of B&ES and Cibse have repeatedly cautioned, unless there is a will from government to enforce such legislation, the air conditioning industry doesn’t stand much chance of benefiting.
A significant section of the report is devoted to the market shares of individual, suppliers which will prove interesting reading to the companies themselves.
AMA derives its estimates from primary research with the companies themselves, so there is inevitably going to be some margin of error involved. There is also a question as to how comprehensive its listings are, particularly in chillers, since such players as Geoclima, Klima-therm and Star Refrigeration are absent.
However, all in all, the market report provides a very detailed breakdown of the factors likely to drive the growth of air conditioning and could provide much needed evidence to back up sales presentations and the like.
The report, Ventilation and Air Conditioning Market Report – UK 2015-2019, complete with 33 tables and charts, is available, price £725 from AMA Research via www.amaresearch.co.uk.