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 93 employees, and generates about $31-32 million in annual revenue.
- The HVAC and refrigeration equipment manufacturing industry consists of about 1,400 companies, employs 133,500 workers and generates $45 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
Mar 17, 2023 - HVAC Distributors’ Sales Rise
- Member companies of the trade group Heating, Air-Conditioning & Refrigeration Distributors International (HARDI) posted growth in January, but challenges remain. HARDI members experienced average monthly growth of 6% in January compared to the prior month. Demand was somewhat diminished by a reduction in the number of heating degree days in January in five of the organization’s seven regions. HARDI said the industry continues to face several challenges, including a reduced ability to fully pass price increases on to customers, elevated interest rates, weaker consumer confidence, and the drop in existing home sales.
- Mortgage rates dipped slightly after the collapse of Silicon Valley Bank, but housing industry watchers are uncertain if lower rates will persist long enough to provide much relief from the affordability issues that have slowed the US housing market, according to Yahoo Finance. Some financial market watchers note that the banking sector's jitters could slow the Federal Reserve’s strategy of taming inflation with rate hikes. Redfin chief economist Daryl Fairweather told Yahoo Finance, “There's still a lot of uncertainty but in the near term, I do expect mortgage rates to drop. And I expect buyers to take advantage of those mortgage rates because we've seen buyers be incredibly sensitive to those interest rates.” However, some industry insiders suggest that rates would need to drop and stay low for a sustained period to lure more buyers into the market.
- Multifamily developer confidence improved in the fourth quarter of 2022 but remained in negative territory, according to February’s Multifamily Market Survey (MMS) report by the National Association of Home Builders (NAHB). The Multifamily Production Index (MPI) rose two percentage points in Q4 to 34 compared to the third quarter of 2022. The Multifamily Occupancy Index increased by four points to 49 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. While multifamily housing demand is robust, supply is catching up with demand in some markets. The NAHB expects multifamily production will slow significantly over the next two years after rapid growth in 2022. Developers face several challenges, including high regulatory costs, difficulty securing new project financing, and high interest rates.
- US shipment volume of central air conditioners decreased 24.2% year over year in January 2023, according to a report released in March by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). Shipments of air-source heat pumps fell 13.4% in January compared to a year earlier. Shipments of most other types of HVAC and water heating equipment saw year-over-year gains in January, including commercial electric storage water heaters (up 62.3%), commercial gas storage water heaters (+37.4%), residential electric storage water heaters (+4.2%), and residential gas storage water heaters (+1.1%). January shipments of gas warm air furnaces dropped 16.5% year over year, and oil warm air furnace shipments were down 7.3%.
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