HVACR Equipment Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,400 HVAC and refrigeration (HVACR) equipment manufacturers in the US produce and sell heating, ventilation and air conditioning systems for residential and nonresidential buildings, as well as commercial and industrial refrigeration and freezer equipment. Firms may also sell commercial and industrial fans and blowers and air purification equipment.
Dependence on Construction Activity
Demand for HVAC and refrigeration equipment is driven by new residential and commercial construction activity.
Energy Efficiency Regulations
HVACR equipment manufacturers are forced to keep up with evolving regulations to promote energy efficiency.
Industry size & Structure
The average HVAC and refrigeration equipment manufacturer operates a single plant, has 105 employees, and generates about $35 million in annual revenue.
- The HVAC and refrigeration equipment manufacturing industry consists of about 1,400 companies, employs 148,000 workers and generates $49 billion annually.
- The industry is somewhat concentrated, as the 20 largest companies represent 53% of industry revenue.
- Large companies include Carrier Corporation, Goodman (part of Daikin Group of Japan), Trane (part of Ingersoll-Rand), Johnson Controls, Lennox International, and Rheem.
Industry Forecast
HVACR Equipment Manufacturers Industry Growth
Recent Developments
Nov 18, 2024 - Home Builder Sentiment Rises
- Home builder confidence in the single-family market increased in November, marking the third consecutive month of sentiment improvement, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose three points to 46 in November 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said builders are generally upbeat about the election outcome, and future sales expectations improved in November. The HMI survey also showed that 31% of builders reduced home prices in November, and the average price reduction fell slightly to 5% from 6% in October.
- Multifamily developers’ confidence was mixed in the third quarter of 2024, according to the National Association of Home Builders (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) rose two points in Q3 2024 to 40 compared to the third quarter of 2023. The Multifamily Occupancy Index decreased by seven points to 75 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include a tight lending environment, higher borrowing costs, regulations, and land availability. The NAHB forecasts that multifamily construction activity will remain weak for about another year amid a significant volume of projects under construction. Multifamily construction is expected to return to more robust growth near the end of 2025.
- The Dodge Momentum Index (DMI) decreased by 5.3% in October 2024 to 197.2 (2000=100), down from the revised September reading of 208.2. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the institutional planning component fell by 2% in October, and commercial planning declined by 6.7%. Dodge’s associate director of forecasting, Sarah Martin, said, “In addition to data center planning normalizing, a moderate pullback in the number of planning projects for several other nonresidential sectors also contributed to the decline in the Dodge Momentum Index for October. Regardless, owners and developers remain confident in next year’s market conditions, and the planning queue remains poised to spur stronger construction activity in 2025, following deeper rate cuts by the Fed.”
- For the tax year 2023, about 2.3 million tax returns utilized the Energy Efficient Home Improvement credit (25C tax credit) under the Inflation Reduction Act (IRA) of 2022, according to the Internal Revenue Service’s (IRS) most recent clean energy tax credit statistics. The 25C tax credits, which are based on 30% of the improvement’s cost, help homeowners pay for qualifying energy-efficiency improvements to their primary or secondary residences. The credits include a total annual credit of $1,200 for insulation and air-sealing home-improvement projects. The credits are available until 2032, and the combined annual maximum credit is capped at $3,200. In the 2023 tax year, the most expensive type of improvement claimed was for purchasing and installing electric and gas heat pumps, with an average cost of $11,213.
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