The air conditioning market - Italy

1.2 World market

The size of the global market for air conditioning systems has been estimated at $*** billion in ****. It is expected to grow at a CAGR of *.*% from **** to ****. The spread of the COVID-** pandemic negatively impacted air conditioner demand in **** due to reduced consumer spending. However, the market recovered in **** and registers stable growth due to changing weather conditions and increased demand for commercial building globally. In addition, growing consumer interest in convenience and comfort is expected to support demand for air conditioners over the forecast period.

Global air conditioning market World, ****-****, billion USD Source: ****

Air conditioning systems are ubiquitous, although affordability of environmentally optimized products remains a challenge in developing countries. In addition, economic growth in emerging markets continues to accelerate, and demand for air conditioning is expected to grow steadily in the coming years. The market is also expected to be driven by factors such as promising growth in the construction and tourism sectors. Population growth in some regions of the world is also expected to positively affect residential and commercial construction and thus increase demand for air conditioning systems.

1.3 Domestic market

The ATECO code we refer to in this section is **.**"Steam and air conditioning supply" and that includes the following activities:

production, capture and distribution of steam and hot water for heating, motive power and other uses production and distribution of cold air production and distribution of chilled water for cooling purposes production of ice for food and non-food purposes (***)

The graph below shows that the Italian air conditioning market has been in gradual decline for ** years.

From **** to ****, the annual national turnover of the sector has dropped from *,*** to *,*** million euros, a significant decline of -**%.

Turnover of the "Steam and air conditioning supply" sector Italy, ****-****, million euros Source: ****

The domestic air conditioning market was affected by the Covid-** pandemic in ****, only to recover in ****, as shown by data from the Italian association Assoclima Confindustria. These numbers allow us to analyze the evolution of industry turnover by type of air conditioning system component.

We see that monosplit, multisplit and VRF systems are the most successful.

Turnover evolution of the air conditioning system component market, by type Italy, ****-****, % Source: ****

1.4 Foreign trade

The HS heading we refer to in this section is ****, which includes all types of "air-conditioning machines, comprising a motor-driven fan and elements for the variation of temperature and humidity, including those machines in which humidity cannot be separately regulated".

Italy's trade balance for these products remains fairly stable over the years, although as can be seen in the graph below Italy now imports almost as much as it exports air conditioning machines whereas a few years ago it imported more than it exported.

From **** to ****, exports increased by **% from $USD **** million to $USD **** million, while imports increased by **% from USD **** million to USD **** million. 

Foreign trade in air conditioning machinery Italy, ****-****, million $ USD Source: ****

Germany, France, Spain, Belgium

Poland,

**.* percent

air conditioning machinery

Destinations of air conditioning machinery exports Italy, ****, in % Source: ****

machinery

China

Thailand

Czech Republic

Origins of air conditioning equipment imports Italy, ****, in % Source: ****

2.1 The habits of Italians

According to the Istat Report on Household Energy Consumption in ****, half of Italian households (***).

single hot/cold units

(***)

(***)

(***)

Type of air conditioning used in homes Italy, ****, % Source: ****

one-third

one-third

one-third

Moreover, in the hot months in Italy, air conditioners are turned on on average more than six hours a day, or in detail three hours in the afternoon, two hours at night and one hour in the morning. In addition, households with at least one elderly person turn on air conditioners on average almost ** minutes less than others. At the territorial level, no particular differences emerge.

Frequency of air conditioning use in households Italy, ****, % Source: ****

2.2 The seasonality of the market

We also know that demand in the air conditioner market is very cyclical and is driven mainly by heat waves in the target country.

This is demonstrated by the following graphs, which show Google's trend data for the terms "Air Conditioning" and "Air Conditioner": we immediately notice peaks of interest in July and August, which are the months when it is the hottest of the year.

Search interest for "Air conditioning" Italy, ****-****, Google Trends Index Source: ****

Search interest for "Air conditioner" Italy, ****-****, Google Trends Index Source: ****

N.B. The graphs below represent the index of searches for the keywords "Air conditioning" and "Air conditioner" in Italy, between **** and ****, compared to the time when the rate of use of this keyword was highest (***). So a value of ** means that the keyword was used twice less in the region in question, while a value of * means that there is insufficient data for this keyword.

2.3 The impact of the energy crisis

An energy crisis is defined as follows, according to AGN Energy:"when demand for a renewable and nonrenewable source of energy increases, but its availability decreases or cannot meet demand, this creates a price increase, resulting in problems for both the population and industries. "

In order to understand the future of air conditioning in Italy, it is also necessary to take into account current events and their future consequences, and thus the energy crisis that Europe is experiencing, caused in particular by Russia's political use of gas resources.

However, the Italian population does not seem ready to give up air conditioning. In fact, according to a survey conducted by Unipol in ****, only ** percent of Italians would be ready to give it up to cope with the crisis.

Energy crisis: Italians are ready to... Italy, ****, % Source: ****

significant

**%

quite or very capable with contributing to the country's energy savings

*%

How much is the individual able with his or her daily actions to contribute to the country's energy savings? Italy, ****, % Source: ****

** percent

** percent

** percent

And which of the following hold you back from engaging in these behaviors? Italy, ****, % Source: ****

3.1 Italian market structure

Thanks to the graphs below, which take Istat data, we can see that the structure of the "Steam and air conditioning supply" sector is not changing in Italy. The number of companies in the sector has in fact increased from *** to *** (***).

Number of enterprises and employees in the "Steam and air conditioning supply" sector Italy, ****-****, units Source: ****

ATECO **

"Supply of electricity, gas, steam and air conditioning

The regions with the most companies in the sector are Lombardy with **** local units, the Autonomous Province of Bolzano (***).

3.2 Italian production and its outlets

The product codes we refer to in this section are part of the category "Manufacture of equipment, non-domestic use, for refrigeration and ventilation" and are as follows :

******** Heat exchangers ******** Air or gas liquefaction apparatus and devices ******** Air conditioning systems of the wall or window type, forming a single body or of the "split system" type (***) ******** Air conditioning machines and appliances of the type used for motor vehicles ******** Air conditioners equipped with refrigeration units ******** Other air conditioners, without refrigeration equipment

In total, Italian production by value of this product category has increased quite a bit over the past eleven years from **** to **** million euros ; a +**% change.

Annual production in value of "equipment, of non-domestic use, for refrigeration and ventilation" Italy, ****-****, in millions of euros Source: ****

the outlets for Italian production

Outlets for Italian production of refrigeration and ventilation equipment Italy, ****, % Source: ****

detail

production,

Annual production in value and by type of "equipment, non-domestic use, for refrigeration and ventilation" Italy, ****-****, in millions of euros Source: ****

air conditioners equipped with refrigeration units

heat exchangers

Breakdown of production of "equipment, of non-domestic use, for refrigeration and ventilation" Italy, ****, % Source: ****

4.1 Type of products

An air conditioner consists of two main elements, the outdoor unit that is the motor and the indoor unit from which the conditioned air comes out. The indoor unit is what is called the split unit.

[***]

4.2 Market prices charged and production costs

Average prices

[***]

Installation costs

[***]

Consumer price index

Consumer prices for household appliances and home appliances have remained fairly stable over the past year.

Consumer price index for "home appliances and household equipment" Italy, ****-****, Base ***=**** Source: ****

Industrial producer price index

In the graph below, it can be seen that the industrial producer price index has increased significantly compared to ****.

Industrial output price index for "Supply of steam and air conditioning". Italy, ****-****, Base ***=**** Source: ****

5.1 Regulations

As of May *, ****, a new rule applies in Italy for all public buildings (***): the temperature of the air conditioner cannot be lower than ** degrees. It does not apply to private homes and will remain in effect until March **, ****. The winter limit will be ** degrees.

Moreover, air conditioners in Italy are also subject to the European Commission's Delegated Regulation US No. ***/****, which can be found at this link.

6.2 Segmentation of Italian actors

• Edison Next Spa
• Fen Energia
• Cristoforetti Servizi Energia Spa
• Varese Risorse Spa
• Arcoservizi
• Samsung Italia