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Latest News

Non-residential construction, with little help from the housing market, is likely to support solid growth in the HVAC industry in 2007.

The non-residential construction market is expected to increase by nearly 7% in 2007, according to the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation's leading construction forecasters.

The anticipated growth follows on the heels of some 6% increase last year. Forecasters expect balanced growth between the commercial/industrial and institutional sectors. They project strong construction activity in office buildings, hotels and health care facilities, according to the AIA forecast.

The housing market, on the other hand, is forecast to make only a moderate recovery from the sharp decline of 2006. Last year, new home sales fell by the largest amount in 16 years. But December sales rose for the second month in a row, as average home prices continued to fall, aiding affordability.

Building permits, an indicator of future construction, rose in December, versus the previous month, according to the U.S. Housing and Urban Development, but remained more than 24% below the pervious year's level.

"Unless there is a significant downturn in the overall U.S. economy, the prospects for nonresidential construction are very favorable," said Kermit Baker, AIA chief economist. "The high level of projected activity will help offset some of the effects of the slumping residential market."

HVAC manufacturers expect modest growth in 2007, Contractor Magazine reported recently. Sales and shipments in the hydronic heating market are expected to increase in "the low single digits in 2007," the publication reported, and sales of tubing, boilers and accessories for the radiant heating market are forecast to rise by 10% - 15%, manufacturers said. Plumbing contractors were also optimistic about the opportunities for business growth in the commercial sector, Contractor reported.

2007 Market Segment Consensus Growth Forecasts (AIA)

Office Buildings9%
Hospitals and health care6.8%
Public Safety4.5%