The British Services Research and Information Association (BSRIA) has released its first snapshot of the UK HVAC and smart energy market landscape for products after Brexit.
It is estimated that the smart energy and HVAC product market is worth £4.5 billion in the UK each year. Market growth was expected to be a healthy 3.1% for 2016 prior to the Brexit vote but Building Services Research and Information Association (BSRIA) research with suppliers post-Brexit now anticipates this will shrink to 1.1%, a reduction of £95 million compared with the pre-Brexit view.
In particular for air conditioning, the forecasted growth has dropped from 12.8% down to 5.5%, while smaller splits have suffered because of a cool summer in the first half of the year, along with issues with the distribution chain, higher than expected residual stocks and a weakening in the critical retail market.
VRF and central plant products are much more closely linked to bigger schemes which are close to completion: typically offices and hotels. Project delays resulting from Brexit may have a small effect in 2016 but will mainly impact the market between 2017 and 2019 according to BSRIA.
However, floor space statistics suggest a big growth in completed projects in 2017 so this will likely mask any Brexit effect until 2018, according to the snapshot.
Andrew Giles, director of worldwide market intelligence at BSRIA, said: “Around 80% of the £2.2 billion market is domestic boilers, water heaters and radiators. Renewable alternatives remain niche markets: heat pumps are falling with RHI having a limited impact. The main heating markets are saturated and over 90% of sales are for replacement and extensions/refurbishment.”
The UK has, by some distance, the biggest boiler market in the world, with almost 1.7 million boilers sold each year and this is expected to continue for the next few years.