BSRIA estimates that the UK HVAC and smart energy market is worth £4.5 billion a year. In 2016, the organisation expected a 3.1% market growth before the Brexit vote in June. But now, BSRIA researches have dropped their forecast for growth to a “meagre 1.1 per cent”. The difference between the two forecasts is £95 million a year less, according to BSRIA.
Air conditioning market could cool off
Big construction projects which include VRF and centralised HVAC plant, such as in hotels, offices or refurbishments, the research suggests, will not be greatly affected by the Brexit vote in 2016. But, between 2017 and 2019, the market could feel the impact of leaving the EU.
BSRIA expects that some project completions could be delayed from 2016 to 2017 because of the Brexit, which is why the organisation is pessimistic about the growth.
The recent devaluation of the pound sterling will make imported air conditioning units more expensive, most packaged systems of which are made in Europe and Asia. BSRIA states that this affect, however, will have a 'limited effect' on the air conditioning market. Companies will either pass on the cost or take lower margins.
But, UK fan coil and 'airside product' manufacturers companies stand to gain from the lower value of the pound because their products will be cheaper for foreign buyers.
“Around 80 per cent 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 per cent of sales for replacement and extensions/refurbishment.
“With the death of the Green deal and other schemes BSRIA had expected a flat market for heating but now expect a small proportion of consumers to delay going ahead with refurbishment because of the general uncertainty surrounding Brexit resulting in a drop of 1.2 per cent in the market.”