Frost: Chinese Building Industry Spurs Demand for HVAC Control Products
January 11, 2008 // Published as a news service by IHS
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The Chinese heating ventilation and air conditioning (HVAC) control products market is growing fast, according to Frost & Sullivan, due to high growth of the Chinese building industry, a booming Chinese economy and continued urbanization, especially in tier-two and tier-three cities, as they prepare for the Beijing Olympics and the Shanghai World Expo.
The Chinese government's efforts to implement energy-saving programs are driving demand for these system installations.
Recent analysis from Frost & Sullivan of the Chinese HVAC control products markets found earned revenues of $300 million in 2006, with estimates to reach $803.9 million in 2013.
Driven by the high growth of fixed investment, the Chinese construction industry has achieved consistent growth to become the third largest in the world after the U.S. and Japan, analysts said.
"Although the Chinese building industry can slow down in the future due to a few measures taken by the government to curb the overwhelming increase of fixed investment since 2004, it is still likely to grow steadily in the next three years, spurring the HVAC control products in China," said Frost & Sullivan consulting analyst Alex Zhao.
HVAC equipment plays an important role in maintaining environmental comfort, as well as building energy efficiency. Analysts said for this reason, the HVAC control system is a core part of the building automation system (BAS), which creates an intelligent building by reducing energy and maintenance costs, while creating a comfortable lifestyle for the occupants.
Analysts said builders' narrow focus on costs, however, suppresses a few benefits of BAS. Since manufacturers and system integrators have to complete the whole system within the stipulated budget, they eliminate a few critical function units in BAS, rendering the system less effective.
In addition, builders refuse to invest on service and maintenance, as they focus mainly on short-term benefits. This reduces the longevity of certain BAS components.
"Market participants need to promote the focus on indoor air quality (IAQ) and energy-saving awareness among potential customers," said Zhao. "During this course of promotion, energy-saving incentive policies endorsed by the Chinese government are expected to play an important role."
These policies include tax exemptions and incentive payments for the purchase of energy-efficient equipment, and penalties for failure to install them. Analysts said these steps are likely to increase awareness on the importance of energy conservation and drive new BAS installations and the sale of HVAC control products.
Source: Frost & Sullivan.