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 100 employees, and generates about $35 million in annual revenue.

    • The HVAC and refrigeration equipment manufacturing industry consists of about 1,400 companies, employs 143,700 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

                                Jan 17, 2024 - HVACR Equipment Orders, Shipments Rise
                                • The value of US shipments of ventilation, heating, air conditioning, and refrigeration equipment saw a moderate increase late in the third quarter of 2023. New orders for ventilation, heating, air conditioning, and refrigeration equipment also saw healthy gains over the same period. The value of manufacturers’ ventilation, heating, air conditioning, and refrigeration equipment inventories increased sharply late in Q3. Manufacturers may have built heating equipment inventories ahead of peak season for the repair and replacement market.
                                • The value of US commercial construction starts is expected to be mixed in 2024, depending on project type, according to a recent forecast by Dodge Construction Network. Marking a potential record level of activity for the sector, manufacturing construction will rise 16% to $112 billion in 2024, supported by the CHIPS and Science Act and the Inflation Reduction Act. Amid a pullback in planned investments by major warehouse builders Walmart and Amazon, the value of warehouse construction is expected to decline 11% in 2024 to about $44 billion. Low occupancy and weaker demand will reduce office construction spending to about $37 billion in 2024, down 6% compared to 2023. Office projects will be mostly confined to alterations to existing buildings. Speculative office construction, where offices are built before securing a tenant, has become less common.
                                • New single-family home sales decreased 12.2% month-over-month and were up 1.4% year-over-year in November 2023, according to the US Department of Commerce. While high interest rates continue to weigh on new home sales, the expectation that interest rates have peaked and tight inventories of existing homes for sale may boost new home sales later in 2024, according to the National Association of Home Builders (NAHB). Lower home prices may also lure buyers; the median new home sales price in November was $434,700, down 6% from November 2022 but up 4.8% compared to October 2023.
                                • Pressures, including high interest rates and a shortage of new homes available to purchase, are prompting housing bulls on Wall Street to construct entire build-to-rent communities, according to The Wall Street Journal. In Q3 of 2023, large landlords that own between 100 and 1,000 homes purchased just 1% of homes sold in the US, compared to 3% for all of 2022, according to John Burns Research and Consulting. Once a model that worked well when foreclosure rates were higher, industry watchers suggest that finding and managing investment homes individually has become too time-consuming, costly, and inefficient. While the build-to-rent community market is still small – about 900 neighborhoods in the US, according to the Urban Institute – the National Association of Home Builders believes that soon 10% of new homes will be build-for-rent.
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