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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 20, 2024 - HVACR Equipment Orders Soften
                                • US shipments of ventilation, heating, air-conditioning, and refrigeration equipment rose 3.8% in March 2024 compared to the same month in 2023 and increased 14.5% over February. New orders for ventilation, heating, air-conditioning, and refrigeration equipment in March declined 4.5% compared to March 2023 but increased 6.9% from the previous month. The year-over-year slowdown in new orders for ventilation, heating, air-conditioning, and refrigeration equipment may signal demand softness in some segments of the building construction market. High interest rates have slowed demand for single-family homes, and some nonresidential developments face challenges in securing financing amid tighter lending standards.
                                • The number of building permits issued for single-family, privately-owned housing units, a demand driver for building inspection services, decreased 0.8% month-over-month but rose 11.4% year-over-year in April 2024. Single-family housing starts fell by 0.4% month-over-month but increased 17.7% year-over-year in April. Single-family housing completions were up 15.4% month-over-month and gained 13.6% year-over-year in April. National Association of Home Builders (NAHB) Chairman Carl Harris said, “While the start of the year has seen an expansion for single-family home building because of a lack of existing home inventory, home building activity leveled off in April as higher interest rates, tighter lending conditions and lower home building sentiment acted as headwinds on new home construction.”
                                • Total nonresidential building construction spending is projected to rise 9% in 2024 over 2023, according to FMI’s second-quarter 2024 North American Engineering and Construction Outlook. With growth of 19%, manufacturing will lead 2024 nonresidential building construction, followed by lodging (14%), public safety (12%), and transportation (10%). Some other segments of the nonresidential building sector face headwinds, including high interest rates, inflation, and tighter lending standards. These pressures and high vacancy rates will limit office project spending to 2% growth in 2024. Led by a weakening warehouse segment, commercial project spending is forecast to decline by 2% in 2024. High interest rates will also challenge the housing market. Single-family construction spending is forecast to be flat in 2024 after falling 14% in 2023. Spending for multifamily is expected to decline 8% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 2% in 2024 after falling 5% in 2023.
                                • Energy saving HVAC equipment is a leading energy efficiency practice used by green builders, according to a recent study by the National Association of Home Builders (NAHB). Builders with greater than 50% of their projects being green are considered “green builders.” About 96% of green builders said they use right-sized HVAC systems as part of their energy-efficiency practices. ENERGY STAR-certified heating and/or cooling equipment was a key green practice for 95% of green builders.
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