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Ventilation Market - Distribution 2007 By Value
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The UK ventilation, air conditioning
and non-domestic heating market is estimated to be worth some £1.4
billion in 2007, having increased by an estimated 4% in the
2006-2007 period. The core product sectors
of the UK ventilation, air conditioning and non-domestic heating
market include air conditioning, with an estimated 42% share,
ventilation with a 15% share, non-domestic heating, also with a 15%
share, and accessories, including controls, with a share of 28%.
2007 proved to be a reasonably buoyant year for
consumer spending, which tended to impact positively on the demand
for residential air conditioning, ventilation, and heating
products, however there were signs of a slowdown in Q4, as the
impact of the housing slowdown and the ‘credit crunch’ began to
take effect. High levels of Government Expenditure – for example,
in the health and education sectors – have underpinned construction
growth, while offices and retail new build and refurbishment have
been buoyant providing significant motivation for the overall HVAC
market. |
The
level of demand for HVAC products tends to vary regionally throughout the
UK, reflecting various levels of construction activity, local industry
specialisation, also seasonal and climatic factors. There is increasing
overlap between the principal sectors of the HVAC market with heat-pump
based systems competing with boilers, ventilation systems providing
comfort cooling, and underfloor heating competing with radiators.
Current
indications in mid-late 2008 suggest that the overall UK HVAC market is
currently under pressure from the adverse impact of the downturn in
commercial office construction and in the housebuilding sector, though to
date the market has sustained performance. However, our estimates are for
deterioration during 2009-2010 of around 5-6% per annum over the 2-year
period, followed by some market recovery of around 5% during the period
2011-12. It is emphasised that the economic environment in mid-2008 is
extremely volatile, and currently deteriorating, therefore the above
forecasts are subject to change.
Levels
of future growth in the HVAC market are likely to be underpinned by
sustained investment in health and education, also major construction
projects, including, for example, the Olympic infrastructure and
Commonwealth Games. Positive niche sector construction influences include
growth in renewables and waste management operations, decommissioning of
nuclear power stations, also defence sector developments, etc.
It is
likely that the cumulative impact of raw material, refrigerant, and
energy price rises will tend to add value to the overall HVAC market in
the medium term. An adverse impact is represented by a slowing down in
household consumption, as consumers cut back on ‘non-essential’ spending,
which is likely to limit the level of RMI retrofit residential air
conditioning opportunities, also ventilation, heating and accessories
opportunities, etc.
In the
non-housing sector, existing order books are generally firm which will
limit the impact on HVAC product demand in the short term, but
undoubtedly more speculative developments in office and retail
development will become increasingly affected. Commercial office
construction is likely to be the largest casualty of the credit problems,
though given the scale and planning timescales for many projects, the
impact is likely to be stronger in 2009-10.
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