by Brianna Crandall — January 27, 2016—Responses from a recent joint survey sent by ASHRAE Journal and International Exposition Co. to the 1,300 exhibitors at the 2016 AHR Expo being held this week in Orlando, Florida, revealed optimism for this year in the heating / ventilation / air-conditioning / refrigeration (HVACR) industry.
The survey asked HVACR equipment manufacturers to consider what they anticipate the business climate will be for the industry this year regarding sales, market segment activity, and overall expectations. Results were compared to a similar survey sent out in November 2014, which gauged exhibitors’ expectations for 2015.
While some answers varied from year to year by only slight percentage points in either direction, some were drastically different, representing changes and future trends in the industry, points out ASHRAE.
According to the survey, 86% of exhibitors are confident about their business prospects in 2016, with 14% answering “excellent” and 62% selecting “good.” Only 14% rated conditions poor or had no opinion. These numbers, particularly the percentage of “good” answers, are fairly consistent with 2015’s survey, which showed a significant growth in optimism from previous years.
Exhibitors also expressed positive outlooks when asked about their expectations of sales growth in the new year based on prospective clients. Some 81% expected to see an increase in sales. Of those, 21% predicted 10% growth, while 33% anticipated 5 to 10% growth.
In keeping with the positive outlook for industry growth in 2016, 67% of HVACR manufacturers responding to the survey said they plan to introduce a new product at the 2016 AHR Expo. Of those new products, 53% aim to improve energy efficiency.
The survey question asking, “In general, how much are government and / or utility incentives helping to increase the adoption of energy-efficient products and technologies?” lent additional insight in this regard. A full 58% answered “some,” 28% said “very little,” and 5% responded “not at all,” while only 9% said “a lot.”
This feedback shows that the industry would welcome and appreciate more help from incentive programs in the coming year, says AHR.
When manufacturers were asked about their viewpoints on various market segments in the new year, data and telecom centers, hospitals, and healthcare facilities all tied with the residential market for best outlook overall. All were rated “excellent” or “good” by 65% of respondents. Data and telecom centers and residences were both rated “excellent” by 10% and “good” by 55%, while hospitals and healthcare facilities ratings were 16% and 49%, respectively.
Closely following in ratings were light commercial and office buildings with 62% each, and heavy commercial with 60% “excellent” and “good” ratings. These percentages are a sign of stability in the industry, as they are on par with last year’s survey results showing the strongest outlooks in the same markets, points out AHR.
When it came to the anticipated best potential for business in 2016, responses skewed from those of 2015’s survey. A full 42% of respondents selected “retrofit and renovations” as the most opportunistic area of the industry, up 14 percentage points from last year. Only 30% selected “new construction,” which was last year’s number one answer. “Maintenance and replacement” decreased from 32% to 28%.
The next question asked manufacturers to rate the importance of various product features to their customers. Leading the pack of what customers considered “very important” was reliability, with 87%. An additional 11% said reliability was “somewhat important.” The playing field was evened out when totals of “very important” and “somewhat important” were calculated.
Energy efficiency, indoor air quality (IAQ), maintenance, and first-cost totals all fell in the 93% to 98% range. Comfort was considered important to 90% of customers, and sustainability to 82%. When it came to use of recycled materials in the product or its packaging, answers were evenly split, with 50% deeming it important and 50% selecting “not important.”
Examining customers’ needs along with the needs of the industry as a whole, exhibitors’ responses provide a more in-depth understanding of industry trends, says AHR. When exhibitors almost unanimously agree that reliability is very important to customers, for example, it indicates a trend of engineering and manufacturing to greater reliability across HVACR industry products.
A final, open-ended question asked manufacturers what they perceive to be the most important trend or issue in the current HVACR industry. Responses included: renewable fuels, the expansion of the Internet of Things (IoT), building automation, product cost and education, and training and recruitment of HVACR staff. The most common answer was energy efficiency, suggesting that 2016 may see a drastic shift in focus toward creating even more energy-efficient products and technology industry-wide.
The International Air-Conditioning, Heating, Refrigerating Exposition (AHR Expo), which began more than 85 years ago, expects to welcome more than 60,000 attendees and 2,000 exhibiting companies covering all facets of the HVACR industry at this year’s event January 25-27.
