Global HVAC Market - Outlook and Forecast 2023-2028

Market Overview

The global HVAC market is expected to reach USD 309.62 billion by 2028, growing at a compound annual growth rate (CAGR) of 5.43% from 2022 to 2028. This growth is driven by the increasing integration of Internet of Things (IoT) technology with HVAC products, making them more innovative and accessible. The focus on energy efficiency has led to the incorporation of multiple sensors in building ecosystems, including HVAC systems.

In 2022, major economies in the Asia-Pacific (APAC) region, such as China, Japan, and India, witnessed a surge in commercial construction activities due to the establishment of companies in various sectors. This has increased the demand for energy-efficient HVAC systems and explosion-proof equipment regulated by stringent norms, creating significant growth opportunities in the APAC HVAC market. Additionally, the Middle East is experiencing climate changes, including rising temperatures and heat waves, leading to a higher demand for HVAC systems in commercial and residential buildings to control indoor climate conditions and improve air quality.

Product Type

Market Report

No. of Pages


Release Date

February 2023

Base Year


Forecast Period


Market Size

USD 225.5 billion in 2021

Market Segments

Heating, Ventilation, Air Conditioning, End-user, Geography



No. of Companies Mentioned


The post-2021 period is expected to see a significant acceleration in infrastructural construction, with estimated investments of around USD 14.8 trillion in Europe. This will create a substantial demand for HVAC systems in these locations and contribute to market growth. Developed economies, like the UK and France, are adopting net-zero strategies with binding targets for the building and construction sectors. As these sectors account for a significant portion of global energy consumption and carbon emissions, European construction companies are seeking energy-efficient and low CO2 emitting HVAC systems to meet net-zero thresholds.

HVAC systems are crucial for ensuring thermal comfort in buildings. They account for over 15% of the overall building equipment cost and contribute to high operational costs. Therefore, selecting energy-efficient products is essential. The floor and space requirements play a significant role in HVAC system selection.

The commercial sector experienced a decline in 2020 due to the impact on industries like hotels, motels, sports, and convention centers. However, with the recovering economy, the commercial sector has shown steady growth since 2021. Energy-efficient HVAC technologies in residential and commercial buildings can provide environmental and economic benefits, with potential energy savings of up to 40%. Replacing existing equipment with energy-efficient HVAC technologies will drive market growth in the future.

The construction industry is expected to show sustained growth globally due to stable economic conditions and low-interest rates in some European countries. The construction of hotels, amusement parks, offices (private and government), and sports and convention centers supports the HVAC market in the construction sector.

The HVAC market heavily relies on the construction industry, whether it’s new installations for residential or commercial buildings or refurbishments. Increased investments from both public and private sectors, especially in countries like Spain, Cyprus, Italy, and the Netherlands, have boosted the revenue of the HVAC industry. In 2022, the Construction Intelligence Center revised its growth forecast for the European construction industry due to improved performance in major developed city markets and a brighter outlook for the European economy.

Market Segmentation

The market is segmented based on various factors, including heating, ventilation, air conditioning, end-user, geography.

Segmentation by Equipment
Heating – Heat Pump, Boiler Units, Furnaces, Others
Air Conditioning – RAC, CAC, Chillers, Heat Exchangers, Others
Ventilation – Air Handling Units, Air filters, Humidifiers & Dehumidifiers, Fan Coil Units, Others

Segmentation by End-user
Commercial – Office Spaces, Airport & Public Utilities, Hospitality, Hospitals, Industrial & Others

Segmentation by Geography
North America – US, Canada
Europe – Western Europe (Germany, France, UK, Italy, Netherlands), Nordic (Norway, Denmark, Sweden, Others), Central & Eastern Europe (Russia, Poland & Austria, Other CEE Countries)
APAC – China, Japan, India, Australia
Latin America – Brazil, Mexico, Argentina
Middle East & Africa – South Africa, Saudi Arabia, UAE

HVAC, which stands for Heating, Ventilation, and Air Conditioning, encompasses a range of technologies used in commercial, residential, industrial, and public utility buildings. The heating equipment segment of the global HVAC market was valued at USD 91.06 billion in 2022 and is expected to reach USD 123.85 billion by 2028. This segment is characterized by intense competition, with numerous local and domestic vendors.

The air conditioning industry is also highly competitive, with both domestic and multinational vendors. It is a seasonal industry that relies on modern technology. Air conditioners are the fastest-growing segment and have significant market potential in developed and developing economies. The Asia-Pacific (APAC), Europe, and North America regions are expected to experience rapid growth in the air conditioning market due to increased construction activity and demand for renovation projects.

The global residential sector HVAC market was valued at USD 135.63 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 4.99% during the forecast period. The demand from the residential sector has increased by over 5.63%, driven by house refurbishments and stable new construction activity. The preference for larger homes and low-interest rates have led to a rise in home improvements and new constructions. In the United States, many construction projects contribute significantly to HVAC system revenue, and the demand is expected to grow further. In Europe, climatic variations have resulted in high demand for all categories of HVAC products in 2022. The demand for HVAC equipment in the Nordic countries differs considerably from mainland Europe. Construction activities in the region are concentrated in Western Europe, with a strong demand for replacements.

The APAC region holds the largest share of the global HVAC market and is expected to witness a CAGR of 6.44% during the forecast period. This growth is driven by increasing demand from the residential sector as well as commercial offices and buildings. Major economies in APAC, including China, Japan, and India, are experiencing a rise in commercial construction activity due to the establishment of companies across various sectors. In 2022, China accounted for the largest revenue share (43.73%) of the APAC HVAC system market, with an estimated incremental growth of USD 21.81 billion during the forecast period. The Chinese market is witnessing a surge in real estate projects and public-private investments in residential, industrial, and commercial development zones, driven by urbanization.

The European HVAC market was valued at USD 61.2 billion in 2022 and is expected to reach USD 86.49 billion by 2028, registering a CAGR of 5.92% during the forecast period. This growth is primarily driven by Western European countries, with France and Germany accounting for one-third of the market. These countries are projected to experience annual growth rates of 4.72% and 5.93%, respectively, in the forecast period. Factors contributing to the increased sales of HVAC equipment in Europe include rising average construction spending, retail building construction projects, government spending on sustainable building development, industrial developments, urbanization, changing climatic conditions, and growth in disposable income across European countries.

In North America, the adoption of green building strategies is a significant driver in the HVAC market. Green buildings are designed to minimize energy consumption for heating and cooling purposes, focusing on natural airflow and sustainable building materials. This approach helps reduce the energy intake of HVAC systems in order to achieve more environmentally friendly and energy-efficient buildings.

Competitive Landscape

Systemair, Johnson Controls, Zehnder, Ostberg, and Aldes are prominent players operating in the global HVAC market. Other notable participants in the global HVAC market include LG, Panasonic, Carrier, Regal, and several others. These leading vendors prioritize the development of advanced HVAC systems and allocate significant investments towards research and development (R&D) initiatives. Their aim is to expand their product portfolio and gain a competitive edge in the market.

The integration of Internet of Things (IoT) technology presents attractive opportunities to transform the industry. By connecting all HVAC components and enabling efficient device operation through smart management solutions, the industry is poised for significant changes. However, due to intense competition, R&D investments in the HVAC market are limited and predominantly undertaken by large vendors. Additionally, the HVAC market faces challenges related to short time-to-market and the cautious adoption of new technologies. Consequently, R&D investments primarily focus on reducing production costs and enhancing existing product technology to add value, rather than developing entirely new products. As a result, mergers and acquisitions are becoming increasingly common as companies seek to enhance their offerings and capabilities to thrive in the global HVAC market.

Key companies profiled in this report include Systemair, Johnson Controls, Zehnder, Ostberg, Aldes, Bosch, Daikin, Samsung, Mitsubishi Electric, LG, Panasonic, Carrier, Midea, Regal, Raytheon Technologies, Honeywell, Flakt Group, Beijer Ref, Flexit, Grundfos, Swegon, VTS, Nuaire, Nortek, Alfa Laval, Hitachi, Lu-Ve, Vent-Axia, Rosenberg, S & P, WOLF, CIAT, AL-KO, DynAIR, Danfoss, Lennox, Backer Springfield, Dunham-Bush, TCL, TROX, Vaillant Group, Ingersoll Rand, Camfil.

Key Questions Answered

How large is the global HVAC market in terms of monetary value?

The global HVAC market achieved a valuation of USD 225.50 billion in 2022, and it is projected to reach USD 309.62 billion by 2028.

What is the growth rate of the global HVAC market?

The global HVAC market is anticipated to grow at a compound annual growth rate (CAGR) of 5.43% during the period from 2022 to 2028.

What are some notable trends observed in the global HVAC market?

Some notable trends in the global HVAC market include the increasing adoption of energy-efficient products as a replacement for older equipment, the emergence of Internet of Things (IoT) technology facilitating product innovations and replacements, and the demand for HVAC systems in Europe driven by its climatic conditions and heatwaves.

Who are the major players in the global HVAC market?

The key players in the global HVAC market include Systemair, Johnson Controls, Zehnder, Ostberg, Aldes, Bosch, Daikin, Samsung, and Mitsubishi Electric.

Which region dominates the global HVAC market in terms of market share?

The Asia-Pacific (APAC) region holds the largest market share in the global HVAC market, with a valuation of USD 102.17 billion in 2022.

What is the market size of the global Residential HVAC market?

In 2022, the residential sector within the global HVAC market reached a value of USD 135.63 billion.

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Global HVAC Market - Outlook and Forecast 2023-2028

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Global HVAC Market - Outlook and Forecast 2023-2028

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