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Radiant & Hydronics

Survey: HVACR manufacturers optimistic for 2016

Latest Headlines
January 12, 2016

The annual AHR Expo, to be held Jan. 25-27, 2016 in Orlando, Fla., expects to welcome more than 60,000 attendees and 2,000 exhibiting companies covering all facets of the HVACR industry, including radiant and hydronic systems. Responses from a recent joint survey, sent to 1,300 2016 AHR Expo exhibitors by ASHRAE Journal and International Exposition Co., revealed optimism for the coming year in the HVACR industry.

The survey asked HVACR equipment manufacturers to consider what they anticipate the business climate will be for the industry — regarding their sales, market segment activity and overall expectations — for 2016. 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.

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; 81% expected to see an increase in sales. Of those, 21% predicted a 10% growth while 33% anticipated between 5% and 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 in January. 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?” leant additional insight in this regard. Fifty-eight percent 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.

When manufacturers were asked about their viewpoints on various market segments in the new year, data and telecom centers, hospitals and health-care 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 health-care 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.

When it came to the anticipated best potential for business in 2016, responses skewed from those of 2015’s survey. Forty-two percent of respondents selected retrofit and renovations as the most opportunistic area of the industry, up 14 percentage points from last year. Thirty percent selected new construction, which was last year’s No. 1 answer. Maintenance and replacement decreased from 32% to 28% in the year between surveys.

“Numbers like these represent the ever-changing needs of this vast, complex industry,” said Clay Stevens, president of International Exposition Co. “Yes, the market segments have stayed consistent, but their needs haven’t. We are seeing less new construction and a jump in demand for renovations in existing structures. Much of this comes from a market-wide push for energy efficiency and conservation of resources, which I am pleased to see. The trend of improved energy efficiency in products lends hope to the future in regard to streamlining energy usage worldwide.”

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, 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. 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 manufactures 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, building automation, product cost and education, 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.
 

Source: AHR Expo, ASHRAE Journal
KEYWORDS: AHR Expo economy heating manufacturer hydronic systems radiant systems

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    • PMC COLUMNS
      • Dave Yates: Contractor’s Corner
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      • Matt Michel: Service Plumbing Pros
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  • ENGINEERS
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