Air Condition Market

Growing income and population to boost market growth

As per market dynamics, the population growth anticipated to have a favorable impact on residential and commercial construction is also likely to result in a rise in demand for the air condition market. For instance, it's expected that the increased population in Gulf nations will greatly impact construction spending there. By 2050, the Region's population is predicted to increase from 350 million to over 600 million. To assist communities, this is anticipated to spur growth in infrastructure and building-related activities, particularly in housing, healthcare, and educational facilities.

Further, nearly 20% of the electricity consumed in buildings worldwide today is spent on ACs and electric fans for cooling purposes. Increased demand for space cooling is increasing emissions and putting tremendous strain on electrical infrastructure worldwide. There is little question that the need for energy to provide space cooling will increase significantly over the coming decades unless strong governmental interventions are made.

Additionally, according to the IEA, the number of households using air conditioners could reach about 2/3 of all homes by 2050. Half of the total will comprise China, India, and Indonesia combined. ACs are growing more widespread as wages rise and people increase, particularly in the world's hottest regions. ACs and electric fans already account for 10% of all the electricity consumed globally or approximately a fifth of the total electricity utilised in buildings worldwide. The use of ACs is anticipated to increase dramatically during the following three decades, ranking among the main factors driving demand in the international market.

Therefore, such rise in income and population has enhanced the air condition market CAGR across the globe in the recent years.

While AC sales are now concentrated in a small number of developed nations, they are accelerating in emerging economies, which is another factor driving the growth of the air condition market revenue.

The Global Air Condition AC Industry experiences a notable surge in demand due to rising global temperatures. As climate change intensifies, regions previously unaffected by extreme heat are now facing unprecedented temperature increases. This trend compels consumers and businesses alike to invest in air conditioning solutions to maintain comfort and productivity. In 2024, the market is valued at 118.6 USD Billion, reflecting a growing awareness of the need for climate control. The increasing frequency of heatwaves, particularly in urban areas, further drives the necessity for efficient cooling systems, indicating a robust future for the Global Air Condition AC Industry.

Increased disposable income across various regions contributes positively to the Global Air Condition AC Industry. As economic conditions improve, consumers are more willing to invest in home comfort solutions, including air conditioning systems. This trend is particularly evident in emerging markets, where rising living standards lead to greater demand for modern amenities. The ability to afford advanced cooling technologies not only enhances quality of life but also drives market growth. With the projected market value of 118.6 USD Billion in 2024, the Global Air Condition AC Industry is likely to see continued expansion as disposable incomes rise globally.

Urbanization continues to be a driving force behind the Global Air Condition AC Industry. As more individuals migrate to urban centers, the demand for residential and commercial air conditioning systems escalates. The concentration of populations in cities leads to the urban heat island effect, where temperatures are significantly higher than in surrounding rural areas. This phenomenon necessitates effective cooling solutions to ensure livable conditions. By 2035, the market is projected to reach 247.2 USD Billion, highlighting the correlation between urban growth and air conditioning needs. The Global Air Condition AC Industry is poised to benefit from this ongoing trend.

Government regulations and standards significantly influence the Global Air Condition AC Industry. Many countries are implementing stringent energy efficiency standards and emissions regulations to combat climate change. These policies encourage manufacturers to develop more efficient and environmentally friendly air conditioning units. Compliance with these regulations not only helps reduce carbon footprints but also enhances the market appeal of products. As governments worldwide prioritize sustainability, the demand for compliant air conditioning systems is expected to rise. This regulatory environment fosters innovation and competition within the Global Air Condition AC Industry, ultimately benefiting consumers through improved product offerings.

Technological advancements play a pivotal role in shaping the Global Air Condition AC Industry. Innovations such as smart thermostats, energy-efficient compressors, and environmentally friendly refrigerants enhance the performance and sustainability of air conditioning systems. These developments not only improve energy efficiency but also reduce operational costs for consumers. As awareness of energy consumption grows, the market is likely to witness increased adoption of advanced AC technologies. The projected CAGR of 6.91% from 2025 to 2035 indicates a strong inclination towards modernized cooling solutions, further solidifying the Global Air Condition AC Industry's position in the global economy.

By region, the study provides the market insights into North America, Europe, Asia-Pacific, and the Rest of the World. As per market statistics, the Asia-Pacific hard disk market accounted for USD 43724.6 million in 2021 and is expected to exhibit a 45.80% CAGR during the study period. The APAC air conditioning market is anticipated to rise steadily due to China's and India's residential and commercial construction activity and rising consumer spending on luxury products. Additionally, it is anticipated that the Asia-Pacific region's low ownership rate and rising disposable income will favorably affect market growth.

Due to rising demand from China and India, a sizeable portion of the APAC market comprised the residential sector.

Further, the major countries studied in the market report are the U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: AIR CONDITION MARKET SHARE BY REGION 2021 (%)Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Replacement sales are likely to drive growth in the North American air condition market as well as other developed economies around the world. Additionally, it is anticipated that increasing government promotional efforts to encourage the adoption of energy-efficient air conditioning equipment will accelerate the regional air condition market expansion. Further, the US air condition market held the largest market share, and the Canada air condition market was the fastest-growing market in the region.

European Pacific air condition market accounts for the second-largest market share.With a drop in demand for air conditioning systems of more than 10% in 2020, the Middle East and Africa felt the COVID-19 pandemic's effects the most severely. Sales fell due to travel restrictions imposed by various nations, which harmed the economies of the Middle Eastern nations. With significant international events like the FIFA World Cup in Qatar in 2022 scheduled there, the Region is likely to recover quickly, encouraging new construction, which is expected to drive the regional growth of the market.

Moreover, Germany air condition market held the largest market share, and the UK air condition market was the fastest-growing market in this region.

Major market players are spending a lot of capital on R&D to increase their product lines, which will help the air condition market grow even more. Market participants are also taking a range of strategic majors to extend their footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. As per market competitive landscape, players in the air condition industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the air condition industry to benefit clients and extend the sector is to produce locally to decrease operating costs. In recent years, air condition industry has provided medicine with some of the most significant benefits. The air condition market major player such as AB Electrolux (Sweden), Carrier Corporation (USA), Daikin Industries Ltd. (Japan), and others are working to improve the market demand by investing in research and development activities.

Carrier Corporation (USA), With a top-notch, diversified staff, Carrier is the leading supplier of wholesome, secure, and environmentally friendly building and cold chain solutions. The business has been at the forefront of developing novel technology and new sectors from the start. In June 2022, The forthcoming 2023 Department of Energy (DOE) minimum efficiency requirements and test methods were met by a new line of single-stage split system air conditioners from Carrier.

Before the January 1, 2023 installation cutoff for air conditioners supplied in the Southern areas, it is essential that Carrier's most recent launch completely converts inventory in the South to 2023 compliant items.

Also, AB Electrolux (Sweden) For over a century, the world's top appliance manufacturer, Electrolux, has improved living. Fifty-two thousand people were employed globally at Electrolux in 2021, which had sales of SEK 126 billion. Their corporate headquarters are in Stockholm, Sweden, and Nasdaq OMX Stockholm is where the Electrolux share (ELUXb) is traded. In July 2022, Electrolux announced that they are re-entering the Indian market via setting up an exclusive retail store at Saket, Delhi.