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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 5, 2022 - Nonresidential Building Construction Poised for Growth
                                • Nonresidential building construction is expected to gain steam in 2022 and improve even more in 2023, according to the American Institute of Architects (AIA). Spending on nonresidential building construction is forecast to rise 5.4% in 2022 and another 6.1% in 2023. Nonresidential building construction declined 5% in 2021, with only industrial, healthcare, and retail and other commercial segments seeing increases in spending. In 2022, spending will remain weak for the hotel, religious, and public safety sectors, but all major industrial, commercial, and institutional segments are expected to return to growth in 2023.
                                • Equipment manufacturers that rely on contract manufacturers or component suppliers in China may be experiencing increased supply chain disruptions. China’s manufacturing output decreased to a 26-month low in April as its zero-tolerance approach to the pandemic slowed factory output. The Caixin China General Manufacturing purchasing managers’ index (PMI) dropped from 48.4 in March 2022 to 46 in April. A reading below 50 suggests output is contracting rather than expanding. In April, new orders and production fell to their lowest levels since the survey began in 2004, and exports declined at the steepest rate in nearly two years. Delivery times grew at the second-fastest rate in the index’s history amid travel restrictions and raw materials shortages.
                                • Inadequate ventilation can potentially contribute to an environment where COVID-19 is more easily spread by airborne transmission, according to guidance released by the Centers for Disease Control and Prevention (CDC). According to the CDC, exposure to respiratory droplets carrying the virus is the primary way people contract COVID-19. Updated guidance says the virus can spread through airborne particles that can linger in the air for minutes or hours, even among people who are more than 6 feet apart under certain circumstances. HVACR equipment manufacturers may benefit from attempts to address the problem by upgrading HVACR systems.
                                • US shipments of ventilation, heating, air-conditioning, and refrigeration equipment increased 16.4% year over year in March 2022 on an unadjusted basis. Seasonally adjusted shipments decreased 0.2% in March 2022 from February 2021.
                                • US shipment volume of residential electric water heaters increased 15.4% year over year in February 2022, according to the Air-Conditioning, Heating, and Refrigeration Institute. Shipments also increased for central air conditioners (+16.9%), oil warm air furnaces (+14.9%), air-source heat pumps (+11.6%), and residential gas water heaters (+5.4%). Shipment volume decreased for commercial gas water heaters (-14.1%), commercial electric water heaters (-33.3%), and gas warm air furnaces (-2.6%).
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