Global Air Handling Units (AHU) Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Global Air Handling Units (AHU) Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Air Handling Units (AHU) Market size is estimated at USD 14.21 billion in 2023, and is expected to reach USD 19.09 billion by 2028, growing at a CAGR of 6.08% during the forecast period (2023-2028).

Air handling units can be applied in a wide range of locations and building types, such as shopping centers, industrial facilities, warehouses, etc. They are part of a larger HVAC system that ensures that a building has proper climate control with heating and cooling along with the necessary air pressure and air quality to make the occupants in the building comfortable and safe.

Key Highlights

• Air handling units (AHUs) are commonly used in large facilities visited by many people, such as shopping malls, as large facilities frequented by people are subject to strict regulations concerning the exhaustion of carbon dioxide and air cleanliness. A large facility must let large amounts of air into the building and use many blower fans to circulate the air. As the air handling units deliver outside air into the rooms, they can significantly reduce the number of required blower fans.
• With significant growth in population, the use of HVAC systems is becoming increasingly common. For instance, air conditioners and electric fans already account for around a fifth of the total electricity in buildings globally or 10% of all global electricity consumption (according to the IEA).
• According to the European Commission, buildings in the EU are responsible for around 40% of the energy consumption and 36% of greenhouse gas emissions, mainly from construction, usage, renovation, and demolition. HVAC systems account for a considerable share of energy usage in these buildings.
• The HVAC equipment market, including air handler units, is highly dependent on sectors such as construction, government regulations, and new initiatives by the governments of various regions to boost the infrastructure and industrial and manufacturing sectors. Any fluctuations in the growth in the commercial and industrial sectors are bound to impact the demand for HVAC equipment directly.
• The pandemic highlighted the importance of ventilation, which was a significant factor driving the demand for air-handling units. Several studies suggested that COVID-19 transmission was particularly effective in crowded, confined indoor spaces such as workplaces (offices, factories) and other indoor settings, such as churches, restaurants, shopping centers, and vehicles. Ventilation with outdoor air was deemed to dilute contaminants in closed spaces and increase the time required for exposure to an infectious dose, which aided the market's growth.

Air Handling Units (AHU) Market Trends

Rising Urbanization is Driving the Demand for AHUs

• According to the United Nations, the world’s population was projected to reach 8 billion on November 15, 2022. The latest projections by the organization suggested that the global population could reach around 8.5 billion in 2030, 9.7 billion in 2050, and 10.4 billion in 2100. Declining levels of mortality partly influence population growth.
• With significant population growth, the use of HVAC systems is becoming increasingly common. For instance, air conditioners and electric fans already account for around a fifth of the total electricity in buildings globally or 10% of all global electricity consumption (according to IEA).
• A growing proportion of the population now lives in cities across the world. According to the United Nations Conference on Trade and Development, while 52.0% lived in urban areas in 2011, the share of the urban population was projected to have increased to 56.5% in 2021. It is generally higher in the developed (79.5% in 2021) than in the developing world (51.8%).
• Further, urbanization is one of the most significant transformations, along with industrialization and economic development, which greatly impact human society and its living environment. Over the last few years, urbanization has been most pronounced in developing economies, particularly in Asia and Oceania. The urban rate increased from 43.3% in 2011 to 50.0% in 2021, as per the United Nations Conference on Trade and Development. Africa has seen a 4.6 percentage point (pp) increase in the same period. In contrast, further urbanization in the developing economies of the Americas has been relatively modest, as urbanization levels in these regions are already comparable to developed economies.
• In emerging markets in the Asia-Pacific region, especially China and India, many people have been migrating from rural areas to cities, raising government and private spending on housing, commercial construction, and infrastructure. New building constructions are creating significant demand for new equipment installations of heating, ventilation, and air-conditioning systems.

Asia-Pacific is Expected to Register the Fastest Growth

• The air handling unit (AHU) market is anticipated to grow fastest in the Asia-Pacific region during the projected period, primarily due to the expanding infrastructure and building project investments and increased demand for energy-efficient technologies in the area. This market is anticipated to rise throughout the projected period due to technological developments such as intelligent AHUs.
• In the pharmaceutical business, air handling units are primarily used to maintain a regulated atmosphere for medicines and other items with high sanitation standards to prevent contamination, among other things. Due to the development of new chemical and pharmaceutical facilities like the Yeosu Mononitrobenzene Manufacturing Plant and Tuas Biomedical Park New Vaccine Production Facility, the market for air handling systems is anticipated to grow in the region.
• The fast-increasing industrial sector in Asia is one of the primary causes responsible for the most significant share. It is also anticipated that growing urbanization and commercialization in this region's developing nations, including India, Japan, China, and South Korea, will raise demand for air handling systems. Additionally, rising disposable income and a higher standard of life drive demand for pleasant living spaces, which is a significant element driving the market's direction.
• The Asia-Pacific region is crucial to global efforts to attain net zero and a transition to green energy. The "green" trend is exploding throughout Asia-Pacific due to numerous governments establishing national or regional initiatives and programs to promote energy conservation efforts. The government's initiatives provide enormous prospects for technologists in the green and energy efficiency sectors of HVAC and building automation systems.
• Space cooling is the fastest-growing energy use in buildings worldwide and in Southeast Asia. Over the past few decades, there has been significant growth in the region's electricity use for cooling buildings. According to the IEA, only 15% of households in Southeast Asia currently use air conditioners, showing tremendous room for expansion in key regions. The demand for HVAC will grow increasingly cheap for more people throughout Southeast Asia as incomes increase, energy availability improves, and affluence spreads, generating a significant market.

Air Handling Units (AHU) Industry Overview

The competitive rivalry in the AHU market is high, as the market comprises many large vendors that command a prominent market share besides having access to well-established distribution networks.

Many manufacturers are focusing on energy efficiency as one of the key concerns. For instance, in October 2022, Johnson Controls launched a newly redesigned line of air handlers to improve comfort, increase energy savings, and meet DOE 2023 efficiency standards when matched to new outdoor condensers by Johnson Controls brands.

Major vendors in the market studied are involved in both M&A activities and partnerships to gain higher penetration and market share. For instance, in November 2022, Trane Technologies acquired AL-KO Air Technology, a division of AL-KO SE based in Jettingen-Scheppach, Germany. AL-KO Air Technology designs, manufactures, sells, and services a wide range of sustainable air handling units and extraction systems for applications in diverse markets, such as pharmaceutical, healthcare, industrial processes, retail, recreation, and commercial buildings.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support