Let’s do the numbers: in 2014, the HVAC industry is feeling optimistic about technology, growth and success.
It should come as no surprise to anybody that the beginning of a new year often brings with it a sense of hope and renewal. People like to make resolutions, do projects they’ve been putting off, reconnect with old friends, that kind of thing. You can blame the Roman god Janus if you like, or perhaps the Gregorian Calendar we’ve been using since the late 16th century, but January has long signified a time to start over — and look forward.
And when it comes to the HVAC industry, it sure looks like a sense of growth and optimism is on tap for 2014.
One report from Navigant Research suggests that global spending on energy-efficient HVAC systems — which was already on the rise in 2013 — will experience even more substantial growth in 2014, and will surpass $33 billion in annual revenue by 2020. Even more specifically, Navigant also forecasts a nearly doubling in annual revenue spent on commercial building automation systems from 2013 to 2021, in part due to the industry’s technologies that “…continue to evolve from point solutions built from proprietary products toward open and integrated systems converged with modern information technologies,” according to this report.
In fact, last year in an annual survey (via achrnews.com) of 250 heads of energy in 20 industries all over the world, 45% of corporations said that they’ll spend more on energy management — including renewable energy, HVAC, lighting, building technologies, energy software, and energy services — in 2014 than they did in 2013. About one-third of respondents to the survey cited cost savings from proper building energy management as the primary motivation for the increase in spending.
So where will that increased spending be realized? Well, from an increase in U.S. constructions starts. In its 2014 Dodge Construction Outlook, McGraw-Hill Construction predicts that total U.S. construction starts for 2014 will rise 9% to $555.3 billion, up from the 5% increase that was estimated for 2013. This measured expansion, due in part to growing improvements in bank lending, and interest rates that are expected to remain low, will be partially found in a 17% increase in the construction of commercial buildings, with warehouses and hotels leading the way.
Even institutional buildings are expected to see increases – and although they’re expected to be relatively small increases, they’re significant to note because construction of these types of buildings has been in decline for the past five years. Indeed, from Central Michigan University to Wawasee High School in northern Indiana to UNC Charlotte to Montgomery County in Maryland where a six-year school construction budget plan is under discussion, schools of all types and sizes are revitalizing plans for growth and new construction.
And these kinds of surveys and forecasts have lent themselves to ever-growing optimism among HVAC industry leaders. According to an ASHRAE/AHR Expo survey sent to more than 1,000 manufacturers worldwide, 79% of respondents said their prospects for business in 2014 were either good (60%) or excellent (19%) — and that was up from 70% in 2013. 90% predicted their sales to increase in 2014, and those predictions were evenly divided among jobs classified as new construction, maintenance/replacement, and retrofit/renovation.
So how do you feel about 2014? Are you feeling cautious, or is the future so bright you’ve got to wear shades? Let us know your outlook for the new year in the comments below.