Covid and global air conditioning market performance
The Covid pandemic and the air conditioning industry are closely linked. In fact, in the first third of 2020, air conditioning sector sales and exports took a disastrous turn. According to data collected globally, some nations are managing to withstand the impact, but many others are destined to suffer further decline at least until year end.
According to reports in JARN (Japan Air Conditioning, Heating & Refrigeration News) the air conditioning markets (AC) affected most by the instability of the international health crisis, are those of Mali, the Philippines, Thailand and the US. If the emergency is brought under control soon, there is still hope of significant recovery.
Slight increases in Vietnam
In order to combat the Covid-19 epidemic, the Vietnamese government imposed lockdown measures from 1st to 22nd April. This resulted in a fall of around 50% in AC sales performance for that month, compared to the previous year.
Nonetheless, May 2020 saw an increase in demand (about 35% in annual terms), thanks also to the warm climate and the postponement of purchases which would have normally taken place in April. It should be noted however that this recovery did not involve all types of conditioning systems.
The pandemic has in fact delayed large scale projects regarding for example hotels, resorts, offices, restaurants, shopping centres and entertainment complexes. As a result, sales of commercial air conditioners, like packaged or variable refrigerant flow (VRF) models, continue to decline.
Covid and conditioning in the US
The situation in the US is serious, due to the extremely high rate of Covid-19 infection. The widespread presence of the coronavirus is causing a drastic fall in sales of air conditioning systems (estimated at 15% by JARN), which seems likely to continue throughout 2020.
Despite a slight increase in March (due to fears of a possible lack of supplies), sales fell by 64.8% in April. A small recovery was recorded during the warmer months in some states, with Americans preferring portable AC systems which do not require installation.
Possible hope for India
In January and February 2020, air conditioning sales in India registered a double figure increase. Manufacturers therefore produced a large amount of AC stock in order to meet the increased demand expected during the summer months.
This prospect however, failed to materialise, due to the impact of Covid on the air conditioning market. The pandemic led to the whole country being blocked, leaving the AC stock unsold.
There is a glimmer of hope in the domestic AC market, where, once the health crisis is over, potential buyers could emerge among the middle classes (thanks also to the savings families have made during the crisis). It is also hoped that air conditioning system manufacture might return to India, rather than being based in China where it is currently delocalised.
Fall in Chinese exports
At the beginning of February 2020, Chinese manufacturers had ceased production completely due to the pandemic. In the first third of 2020, AC exports fell by 9.1% in terms of volume and 15.4% in terms of value, compared to the first third of 2019.
If we compare export destinations, the situation is more mixed. The volume of exports to Asia rose by 4.8%, calculated on an annual basis, while exports to other destinations fell, ranging from a decrease of 1% in Europe to 25% in North America and Africa.
For further information on the data mentioned above, the original article is available on the IIFIIR website via this link.
Translated by Joanne Beckwith
