The North American market for environmental control systems in buildings reached $3.2 billion in 2004, returning to growth after 3 years in decline.
Demand is forecast to continue growing over the next three years on the back of strong activity in the construction of new buildings, participation in a rapidly growing market for IT convergence and rising energy prices. Other factors contributing to growth include increased demand for sustainable buildings as well as desired to improve energy efficiency and indoor air quality. These are some of the findings of the third study of the North American market for Environmental Control Systems in non-residential building, published by i&i Proplan.
The multi-client study, supported by the major manufacturer suppliers, demonstrate through a whole series of benchmarks that the full potential of this market is not being realized and that the penetration of advanced controls in North America should be larger than it is today. This continent has a larger building stock, a higher spend on building construction, installs more air conditioning and refrigeration equipment, consumes more energy per square foot and has a higher number of heating and cooling degree days than any other developed economy. Nevertheless, it spends considerably less on controls per dollar of construction or per square meter of floor space than many of the developed markets of northern Europe.
Trading conditions for controls manufacturers have been difficult in the last four years. A declining market and increased competition from third-party suppliers have increased price pressures and reduced cost per point and installed prices. This has escalated the relentless process of consolidation of the supply side and widened the gap between the major global companies and the smaller specialist suppliers, bringing about some significant changes in market share status across both the product and systems business.
However, this market now offers the best opportunity in the developed world for sustained growth over the next five years.
On the technology front, a metamorphosis of this industry is under way which is being created by the convergence with IT networks and enabled by Web Services and XML. The report estimates that by 2010 around $1.7 billion, accounting for 40 percent of environmental control system sales, will be fully IP-based. Particularly in North America, within the last two years, there has been a significant move to converge building controls with IT networks. The business is moving away from one solely built upon controls to one committed to delivering information and value-added services to improve the value and performance of buildings.
There are a few global suppliers that have the skills and financial muscle to meet these new challenges and independently grow this business. Most will have to form partnerships led by "super integrators" having the capability and credibility to convince buyers that there is a business case for the investment and they can deliver a no risk, robust, flexible and scalable solution.
Fore more information on the report, visit i&i – Proplan.
