Air Handling Units Market Size, Share & Trends Analysis Report By Product (Single Flux), By Type (Packaged), By Capacity (Up to 5,000 m3/h), By Application (Residential), By Region And Segment Forecasts, 2024 - 2030

Air Handling Units Market Size & Trends

The global air handling units market size was estimated at USD 12.56 billion in 2023 and is projected to grow at a CAGR of 5.1% from 2024 to 2030. The demand for air handling units (AHUs) is rising due to the increasing urbanization, construction activities, and the need for energy-efficient HVAC systems. According to the World Health Organization (WHO), approximately 55% of the global population currently lives in urban areas, and this figure is expected to increase to 68% by 2050, driving the demand for commercial and residential buildings that require AHUs. Government initiatives like the "National Infrastructure Program" in India are boosting construction projects, further fueling the need for AHUs. Additionally, the growing awareness of the benefits of AHUs, such as maintaining fresh air quality and thermal comfort in indoor spaces, is contributing to their popularity.

The growing global population is increasing the requirements for affordable housing units and enhanced commercial infrastructure. According to the United Nations, the global population is expected to reach 9.7 billion in 2050, exhibiting a growth of 2 billion in the next 30 years. This significant increase in the global population is facilitated by the improving standard of living of the masses, increasing lifespan, decreasing mortality rate, and ongoing advancements in technologies. The growing global population is also putting pressure on the real estate sector to provide affordable housing to the masses. As such, new housing projects are being launched worldwide. This is expected to positively impact the growth of the AHU market over the forecast period.

Moreover, governments across the world are providing monetary support to customers by introducing various housing schemes. For instance, the Government of Canada announced through the 2023 Fall Economic Statement a new loan funding worth USD 15 billion, which is USD 9 billion more than the previous funding. With the increasing support from the governments of different countries and the requirement for affordable housing, the residential construction industry is flourishing worldwide. This is expected to surge the demand for AHU market over the forecast period.

Drivers, Opportunities & Restraints

The air handling units market’s growth is driven by several factors, including the increasing focus on energy efficiency, stringent building codes and standards, and the growing need for improved indoor air quality. The rising adoption of smart and connected HVAC systems is also contributing to market growth. For instance, the U.S. Environmental Protection Agency has introduced indoor air quality standards and policies through its Indoor Air Quality Division. The EPA also introduced the Clean Air in Buildings Challenge, publishing a best practice guide for improving indoor air quality. The federal government provided USD 350 billion for state and local governments and USD 122 billion for schools through the American Rescue Plan to improve indoor air quality in public buildings and schools

Moreover, advancements in AHU technologies, such as the integration of IoT and smart sensors, are providing significant growth opportunities. The increasing demand for modular and customized AHUs to cater to specific application requirements is also driving the market. For instance, incorporating IoT with HVAC systems allows companies to scrutinize exterior data such as the number of occupants in the room, humidity level, and ambient temperature, among other things. Smart HVAC systems utilize this data to set optimal temperature, fan speed, and energy consumption. Furthermore, IoT enables predictive maintenance for clients and HVAC companies, which helps decrease maintenance costs and prevent system failure.

The price range for air handling units varies widely depending on factors like size, capacity, features, and application. However, the high initial cost of AHUs and the complexity of installation and maintenance may pose challenges to market growth. Additionally, the availability of alternative HVAC solutions and the need for skilled personnel for AHU operations can also impact the market.

Product Insights

“The demand for single flux product segment is expected to grow at a significant CAGR of 5.4% from 2024 to 2030 in terms of revenue”

The single-flux product segment led the market and accounted for 53.2% of the global revenue share in 2023. The demand for single-flux and double-flux air handling units is driven by the need for efficient and cost-effective HVAC solutions in various applications. Single-flux AHUs are commonly used in smaller commercial and residential spaces, as they provide a simple and economical way to condition the air. For example, single-flux AHUs are often installed in small offices, retail stores, and single-family homes.

Double-flux AHUs, on the other hand, are designed for larger and more complex buildings, as they offer improved energy efficiency and better control over indoor air quality. These units are frequently used in hospitals, schools, and large commercial complexes where precise temperature and humidity control is essential. The growing construction of commercial and residential buildings, particularly in developing regions, is fueling the demand for both single-flux and double-flux air handling units to meet the increasing need for comfortable and healthy indoor environments.

Type Insights

“The demand for packaged air handling units type segment is expected to grow at a significant CAGR of 5.3% from 2024 to 2030 in terms of revenue”

The packaged air handling units type segment led the market and accounted for 58.9% of the global revenue share in 2023. Packaged AHUs are pre-assembled units that offer ease of installation, cost-effectiveness, and compact design. The increasing demand for energy-efficient and space-saving HVAC solutions in commercial and residential applications is driving the growth of packaged AHUs.

The modular air handling units segment is expected to witness significant growth over the forecast period, due to their flexibility, scalability, and ability to meet specific application requirements. Modular air handling units are increasingly used in commercial and industrial applications due to their flexibility, efficiency, and ability to maintain high indoor air quality. They are commonly found in office buildings, shopping malls, hospitals, hotels, and other large facilities where precise temperature and humidity control is required. These aforementioned factors are anticipated to drive the demand for air handling units (AHU) market over the forecast period.

Capacity Insights

“The demand for 5,001 to 10,000 m³/h capacity segment is expected to grow at a significant CAGR of 5.6% from 2024 to 2030 in terms of revenue”

The up to 5,000 m³/h capacity segment led the market, accounting for 32.6% of the global market revenue share in 2023 owing to the increasing adoption of AHUs in small and large-scale applications such as warehouses, industrial facilities, and kitchens and food service properties. Moreover, smaller capacity AHUs are generally more cost-effective compared to larger units, making them attractive options for residential and small commercial projects with limited budgets. Their lower upfront costs contribute to their widespread adoption.

The demand for 5000-15000 m³/h capacity segment as it is widely used in commercial and industrial applications due to its suitability for medium to large-sized spaces. The increasing demand for AHUs in office buildings, shopping malls, and manufacturing facilities is driving the growth of this segment. These mid-range capacity AHUs are commonly used in buildings like small offices, retail stores, restaurants, and light manufacturing facilities that require more airflow than a typical residential unit but less than large commercial or industrial complexes. Their versatility and ability to handle the ventilation, heating, and cooling needs of medium-sized spaces make them a popular choice.

Application Insights

“The demand for commercial application segment is expected to grow at a significant CAGR of 5.3% from 2024 to 2030 in terms of revenue”

The commercial application segment accounted for 46.8% of the global revenue share in 2023. The growing number of commercial spaces such as shopping malls, offices, theatres, and hotels is anticipated to fuel the product demand in commercial application. Many factors are considered while choosing commercial air handling units (AHU), such as air quality, building design, and energy efficiency. The budget and the lifespan of the system are additional factors to consider.

The demand for air handling units (AHUs) is rising in industrial applications due to the need for precise temperature and humidity control, as well as efficient air filtration and circulation. For instance, in the pharmaceutical industry, AHUs are critical for maintaining clean room environments required for manufacturing sterile drugs and medical devices. These units filter the air to remove particulates, control temperature & humidity, and provide the necessary air changes per hour to meet stringent clean room standards.

Regional Insights

The North America, led by the U.S., Canada, and Mexico accounted for a significant share in terms of revenue of the global air handling units (AHU) market in 2023. The growth of the market in this region can be attributed to the expansion of urban areas, the presence of industrially developed countries, and the stringent implementation of rules and regulations in North America. For instance, according to Statistics Canada, the population of the country was approximately 39,292,355 in October 2022 which was 2.3% more than its population recorded in October 2021. The continuous increase in the population of Canada over the forecast period is expected to surge residential construction activities in the country, thereby driving the market demand over the forecast period.

Asia Pacific Air Handling Units Market Trends

“China to witness fastest market growth at 6.1% CAGR”

The AHU market in Asia Pacific is experiencing substantial growth due to rapid urbanization, increasing construction activities, and growing demand for energy-efficient HVAC systems in the region. Countries like China, India, and Japan are major contributors to market growth, driven by government initiatives and investments in infrastructure development.

The air handling units market in China is estimated to grow at a significant CAGR of 6.1% over the forecast period. According to the International Trade Administration’s April 2023 report, China is the world’s largest construction market and its urbanization rate reached to 64.7% in 2022. The high urbanization rate reflects the growth in commercial, industrial, and residential building construction sectors. For example, in January 2022 Shanghai Pudong International Airport’s expansion entered into the fourth phase, and after the completion of its expansion, the airport is likely to facilitate annual passenger throughput of 130 million passengers in 2030.

Europe Air Handling Units Market Trends

The surge in construction activities is propelling a heightened demand for AHUs. According to Eurostat, the value of sold industrial production in the European Union in 2022 was USD 6744.07 billion, up by 19% from USD 5685.36 billion in 2021. Moreover, the increasing pace of industrial production is a significant driver behind the growing demand for the AHU market.These are widely used in commercial and industrial applications to provide heating, cooling, and ventilation for indoor spaces. They are essential components of HVAC systems, responsible for distributing conditioned air throughout a building while maintaining optimal temperature, humidity, and air quality levels for occupant comfort and health.

Key Air Handling Units Company Insights

Some of the key players operating in the market include Carrier Corporation, Trane Inc., Rheem Manufacturing Company, Johnson Controls, LG Electronics, among others.

• Trane is a member of the Ingersoll Rand family of brands. The company operates its business in two segments, namely climate and industrial. The industrial segment offers products and services that enhance energy efficiency, operations, and productivity. It includes power tools, compressed air & gas systems, fluid management systems, material handling systems, and utility & low speed consumer vehicles. The climate segment provides energy efficient products and services, including heating, ventilation, and air conditioning (HVAC) systems. The company is engaged in the manufacturing of residential, industrial, and commercial HVAC systems. It offers products, such as HVAC accessories, thermostat controls, ductless systems, geothermal systems, packaged systems, heat pumps, coils, gas & oil furnaces, air handlers, and air conditioners.

• Carrier provides heat pumps, air conditioners, boilers, furnaces, air purifiers, humidifiers, dehumidifiers, ventilators, air scrubbers, thermostats, UV lamps, energy services, and building controls to the retail, commercial, transport, and foodservice sectors. The company was acquired by United Technologies Corporation in 1979; however, it was separated into a separate business in April 2020.

• Johnson Controls designs manufactures and offers solutions that enhance the operational efficiencies of buildings and various systems related to the automotive industry. The company supplies building control systems, automation, HVAC equipment, seating and interior systems, and integrated facility management services. It operates through four business segments, namely building solutions EMEA/LA, building solutions North America, building solutions Asia Pacific, and global products.

Nortek Global HVAC, STULZ GMBH, and Hastings HVAC Inc. are some of the emerging market participants in the air handling units (AHU) market.

• Nortek Global HVAC is a leading manufacturer of heating, ventilation, and air conditioning (HVAC) equipment for residential and light commercial applications. The company offers a wide range of products, including air conditioners, heat pumps, furnaces, and air handlers, under well-known brand names such as Frigidaire, Maytag, and Westinghouse. Nortek Global HVAC has a strong presence in North America and employs over 1,000 people across its manufacturing facilities and sales offices.

• Hastings HVAC Inc. is a Canadian company that designs, manufactures, and distributes HVAC equipment for commercial and industrial applications. The company's product range includes air handling units, rooftop units, and custom-engineered solutions. Hastings HVAC serves customers across North America and has a reputation for providing high-quality, energy-efficient products and exceptional customer service. The company operates manufacturing facilities in Canada and the U.S. and employs a team of experienced professionals in engineering, sales, and customer support.

Recent Developments

• In February 2024, Modine announced that it had entered into a definitive agreement to acquire Scott Springfield Manufacturing, a manufacturer of AHU. Through this transaction, Modine gained immediate access to a complementary product portfolio and a customer base across several industries, such as telecommunications, hyperscale & colocation data centers, healthcare, and aerospace.

• In January 2024, Carrier expanded its HVAC product portfolio manufactured in India with the introduction of air handling units (AHUs) and fan coil units (FCUs) tailored to meet the diverse needs of India's commercial buildings. These new additions, designed to provide custom solutions for healthy indoor environments with high-efficiency air filtering, affirm Carrier's more than five-decade presence in India and underscore the company's commitment to the country's growth under the 'Make in India' initiative.

Air Handling Units Market Report Scope

Global Air Handling Units Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the AHU market based on product, type, capacity, application, and region:

• Product Outlook (Revenue, USD Billion, 2018 - 2030)

  • Single Flux

  • Double Flux

• Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Packaged

  • Modular

• Capacity Outlook (Revenue, USD Billion, 2018 - 2030)

  • Up to 5,000 m3/h

  • 5,001 to 10,000 m3/h

  • 10,001 to 30,000 m3/h

  • 30,001 to 50,000 m3/h

  • Above 50,001 m3/h

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Residential

  • Commercial

  • Industrial

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE