Air Handling Units Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Packaged, Modular, Custom, DX Integrated, Low Profile (Ceiling), Rooftop Mounted, Others), By Capacity (≤5,000 m3/h, 5,001 – 15,000 m3/h, 15,001 – 30,000 m3/h, 30,001 – 50,000 m3/h, ≥50,001 m3/h), By Application (Commercial, Residential), By Region, By Competition, 2020-2030F

Market Overview

Global Air Handling Units Market was valued at USD 13.4 billion in 2024 and is expected to reach USD 19.4 billion by 2030 with a CAGR of 6.2% through 2030. The global Air Handling Units (AHUs) market is driven by several key factors fueling its rapid growth. Urbanization and extensive infrastructure development in emerging economies are creating strong demand for advanced HVAC systems, including AHUs, to maintain indoor air quality and comfort. Increasing focus on energy efficiency and sustainability is pushing the adoption of AHUs with features like heat recovery, variable speed drives, and eco-friendly refrigerants, helping buildings comply with stringent energy regulations and reduce operational costs. Technological advancements such as IoT integration, smart controls, and predictive maintenance enhance AHU performance and reliability, aligning with the rise of smart buildings.

The COVID-19 pandemic has heightened awareness of indoor air quality, boosting demand for AHUs equipped with advanced filtration systems like HEPA filters and UV-C disinfection to ensure healthier indoor environments. Additionally, government regulations and green building certifications such as LEED and BREEAM promote the use of energy-efficient AHUs in new and retrofit projects. Customizable and modular AHUs offer flexibility to meet diverse building requirements across commercial and industrial sectors. Furthermore, global climate change and rising temperatures increase the need for efficient cooling solutions, further driving AHU market growth worldwide.

Key Market Drivers

Rapid Urbanization and Infrastructure Development Driving Demand for Air Handling Units

One of the foremost drivers of the global Air Handling Units (AHUs) market is the rapid pace of urbanization and the consequent surge in infrastructure development, especially across emerging economies such as India, China, Brazil, and Southeast Asia. As populations migrate towards urban centers, the demand for modern residential, commercial, and industrial buildings grows exponentially. This urban expansion requires robust heating, ventilation, and air conditioning (HVAC) systems to ensure comfortable, healthy, and energy-efficient indoor environments, making AHUs an essential component in these developments.

The construction of smart cities and large-scale commercial complexes is also accelerating the demand for advanced AHUs. These systems are integral in maintaining optimal indoor air quality and thermal comfort in spaces such as offices, hospitals, shopping malls, airports, and manufacturing units. The increasing preference for green buildings and sustainable construction practices adds to this trend, as AHUs help meet energy efficiency standards and reduce carbon footprints by optimizing air flow and temperature regulation. 

Government initiatives aimed at boosting affordable housing and infrastructural modernization are further propelling market growth. For example, policies encouraging the development of energy-efficient buildings with certifications like LEED, BREEAM, and WELL promote the adoption of cutting-edge AHUs that feature heat recovery, variable speed drives, and smart control technologies. Moreover, retrofit projects in developed regions seeking to upgrade aging HVAC infrastructure with more energy-efficient and environmentally friendly AHUs also contribute to market expansion.

In summary, the combination of rapid urbanization, rising infrastructure investments, green building mandates, and the push for smart, sustainable cities is creating an environment of strong demand for AHUs globally. This trend is expected to continue as governments and private sectors prioritize improving indoor environmental quality alongside energy efficiency in the built environment. Over 55% of the world’s population lived in urban areas in 2024, with projections reaching 68% by 2050. Global urban infrastructure investment exceeded 3 trillion dollars in 2024, driven by transportation, housing, and utilities development. More than 2,500 smart city projects were underway worldwide by 2024, aimed at improving urban management and sustainability. Annual global construction output surpassed 15 trillion dollars in 2024, with urban infrastructure accounting for nearly 40% of this total. Over 1 billion people were living in informal settlements, highlighting the urgent need for affordable urban housing and infrastructure solutions. Investment in green infrastructure and sustainable urban development reached 400 billion dollars globally in 2024. Digital infrastructure deployments, including 5G networks and IoT systems, increased by more than 30 percent in urban areas worldwide. Water supply and sanitation infrastructure projects accounted for over 25% of urban infrastructure spending globally.

Growing Emphasis on Energy Efficiency, Sustainability, and Indoor Air Quality

Another critical driver propelling the global Air Handling Units (AHUs) market is the increasing focus on energy efficiency, sustainability, and enhanced indoor air quality (IAQ). As energy consumption and environmental concerns rise worldwide, governments, regulatory bodies, and building owners are demanding HVAC solutions that not only provide thermal comfort but also reduce energy usage and environmental impact. AHUs, being a key component of HVAC systems, have evolved significantly with advanced features designed to optimize energy efficiency while improving IAQ.

Modern AHUs incorporate energy-saving technologies such as heat recovery wheels, variable frequency drives (VFDs), and electronically commutated motors (ECMs) that reduce power consumption. These features allow the units to recycle waste heat or cold air, adjust fan speeds based on demand, and operate more efficiently overall. Such advancements help buildings comply with stringent energy regulations and green certification standards like LEED and BREEAM, which are becoming mandatory in many regions. The global push towards net-zero energy buildings further encourages the adoption of highly efficient AHUs to minimize operational costs and environmental impact.

In addition to energy efficiency, the COVID-19 pandemic has significantly raised awareness about the importance of indoor air quality. There is now an urgent need for AHUs equipped with advanced filtration technologies, including HEPA filters, UV-C light disinfection, and activated carbon filters, which can remove pathogens, allergens, and pollutants from the air. Improved IAQ is critical not only for occupant health and comfort but also for productivity in commercial and institutional settings such as offices, schools, and healthcare facilities.

Furthermore, the integration of IoT and smart building technologies enables real-time monitoring and predictive maintenance of AHUs, optimizing performance and reducing downtime. This digital transformation enhances system reliability and energy savings, driving further adoption. Overall, the increasing regulatory emphasis on sustainability, combined with heightened health concerns and technological advancements, is a powerful market driver fueling demand for sophisticated, energy-efficient, and IAQ-focused AHUs worldwide. Global investment in energy-efficient building technologies exceeded 150 billion dollars in 2024 and is expected to grow at over 10% annually. Buildings accounted for approximately 40 percent of total global energy consumption, driving increased focus on efficiency improvements. Adoption of green building certifications such as LEED and BREEAM grew by more than 12% worldwide in 2024. The market for indoor air quality (IAQ) monitoring and purification systems reached over 10 billion dollars globally in 2024. Over 60% of new commercial building projects incorporated advanced ventilation and air filtration systems to improve IAQ.

Download Free Sample Report

Key Market Challenges

High Initial Capital Costs and Complex Installation Requirements

One of the primary challenges facing the global Air Handling Units (AHUs) market is the high initial capital investment and the complexity involved in installation. AHUs, especially advanced models equipped with energy-efficient technologies and smart controls, require significant upfront expenditure. The costs include not only the units themselves but also design customization, integration with existing HVAC systems, and additional components like filters, heat exchangers, and control panels. For many small- to medium-sized enterprises and residential projects, the high purchase price can be a deterrent, delaying or limiting adoption.

Moreover, the installation process of AHUs can be intricate and labor-intensive, often requiring skilled technicians and engineers to ensure proper setup, integration, and commissioning. The units must be carefully matched to the building’s HVAC design, and improper installation can lead to suboptimal performance, higher energy consumption, and increased maintenance needs. In many developing regions, a shortage of qualified HVAC professionals compounds this issue, leading to delays and increased costs.

Another factor adding to the challenge is the space requirement and logistical complexity during installation. Large AHUs often need substantial space in mechanical rooms or rooftops, which may be limited in urban and retrofit scenarios. Additionally, transportation and handling of bulky units can pose logistical hurdles, increasing the overall project timeline and cost.

The challenge of high capital costs and complex installation is particularly critical in emerging markets, where budget constraints and limited technical expertise are prevalent. As a result, these factors can slow down the pace of market growth and adoption of modern AHU technologies, especially in smaller projects or cost-sensitive sectors.

Addressing this challenge requires manufacturers and service providers to focus on offering modular, compact, and easy-to-install AHU solutions, alongside training and certification programs to build local technical expertise. Furthermore, financial models such as leasing, pay-per-use, or performance contracting can help ease the burden of upfront capital costs, making AHUs more accessible to a broader range of customers.

Stringent Regulatory Standards and Compliance Complexities

The global Air Handling Units market also faces significant challenges due to the increasingly stringent and complex regulatory environment. Governments and international bodies are continuously tightening energy efficiency, environmental, and indoor air quality standards to reduce greenhouse gas emissions and improve occupant health. While these regulations drive innovation, they also impose significant compliance burdens on AHU manufacturers, suppliers, and end-users.

Each region may have different standards related to energy consumption, noise levels, emissions, refrigerants used, and filtration efficiency. For example, compliance with certifications like LEED, BREEAM, WELL Building Standard, and ASHRAE guidelines requires AHUs to meet rigorous performance criteria. Navigating this patchwork of global and local regulations can be costly and time-consuming for manufacturers, who must redesign products and processes to satisfy diverse market requirements. Failure to comply can result in penalties, restricted market access, or product recalls, all of which pose financial and reputational risks.

Furthermore, the rapid evolution of regulations related to refrigerants, especially those addressing ozone depletion and global warming potential, adds another layer of complexity. Manufacturers must continually innovate to replace harmful substances with environmentally friendly alternatives without compromising system performance or increasing costs.

End-users, particularly in commercial and industrial sectors, also face challenges in selecting AHUs that meet evolving regulatory standards while balancing cost and operational efficiency. Ensuring that installed AHUs remain compliant throughout their lifecycle, including during maintenance and retrofitting, requires ongoing monitoring and technical expertise.

Overall, the stringent and evolving regulatory landscape demands significant investment in research and development, certification processes, and compliance management. This complexity can slow market entry, increase product costs, and require continuous adaptation from manufacturers and consumers alike.

Key Market Trends

Integration of Smart Technologies and IoT in Air Handling Units

A prominent trend shaping the global Air Handling Units (AHUs) market is the integration of smart technologies and the Internet of Things (IoT) into HVAC systems. Manufacturers are increasingly embedding sensors, connectivity modules, and advanced control systems within AHUs to enable real-time monitoring, data analytics, and remote management. This digital transformation supports the development of smart buildings that optimize energy consumption, improve occupant comfort, and enhance operational efficiency.

IoT-enabled AHUs can collect and transmit data on parameters such as temperature, humidity, airflow, filter condition, and energy usage to centralized building management systems (BMS). Building operators use this information to make informed decisions, such as adjusting ventilation rates, scheduling preventive maintenance, or detecting faults before they escalate. Predictive maintenance powered by machine learning algorithms reduces downtime and extends equipment lifespan, leading to significant cost savings.

Furthermore, smart AHUs support demand-controlled ventilation, which adjusts airflow based on occupancy and air quality sensors, thereby reducing energy waste. This responsiveness is critical in environments like hospitals, schools, and commercial offices where indoor air quality directly affects occupant health and productivity.

The COVID-19 pandemic has further accelerated adoption of these smart AHUs, as building managers seek enhanced air quality control and disinfection capabilities. Features like UV-C light integration and advanced filtration combined with smart control optimize pathogen mitigation while maintaining energy efficiency.

Overall, the move toward connected, intelligent AHUs reflects a broader shift in building management toward automation, sustainability, and occupant well-being. This trend is expected to continue driving innovation and market growth as digital technologies become standard in HVAC solutions worldwide.

Growing Demand for Energy-Efficient and Environmentally Friendly Air Handling Units

Another significant market trend is the growing demand for energy-efficient and environmentally friendly AHUs. Increasing awareness about climate change, rising energy costs, and stringent environmental regulations are pushing manufacturers and building owners to prioritize sustainability in HVAC system design and operation.

Modern AHUs incorporate advanced technologies such as heat recovery wheels, variable frequency drives (VFDs), electronically commutated motors (ECMs), and eco-friendly refrigerants. Heat recovery systems reclaim waste heat from exhaust air to pre-condition incoming fresh air, significantly reducing heating and cooling loads. VFDs and ECMs enable more precise control over fan speeds and motor efficiency, cutting energy consumption during partial-load operations.

Green building certifications like LEED, BREEAM, and WELL further incentivize the adoption of energy-saving AHUs. Compliance with these standards often requires HVAC systems to meet or exceed specific energy performance benchmarks, pushing manufacturers to innovate and provide solutions that deliver both comfort and sustainability.

Additionally, modular and customizable AHU designs are gaining traction, allowing tailored solutions that optimize energy use based on building size, layout, and occupancy patterns. Retrofitting older buildings with energy-efficient AHUs is also a growing market segment as owners seek to improve environmental performance without extensive renovations.

This trend aligns with global efforts to reduce carbon footprints and achieve net-zero energy buildings, positioning energy-efficient AHUs as critical components in sustainable infrastructure development. Market players focusing on eco-friendly innovations are likely to gain competitive advantages as demand for green HVAC solutions rises worldwide.

Segmental Insights

Capacity Insights

5,001 – 15,000 m3/h segment dominated the Air Handling Units Market in 2024 and is projected to maintain its leadership throughout the forecast period, driven by its optimal balance between capacity and versatility. This segment caters primarily to medium to large commercial buildings, including offices, hospitals, shopping malls, educational institutions, and light industrial facilities. These buildings require efficient air handling solutions capable of managing substantial volumes of air to maintain indoor air quality, temperature control, and occupant comfort.

AHUs in this airflow range offer significant advantages by providing sufficient ventilation capacity without the complexity and cost associated with larger, industrial-scale units. Their moderate size allows easier installation and integration with existing HVAC infrastructure, making them a popular choice for new construction as well as retrofit projects. Additionally, the units in this segment often incorporate advanced features such as energy recovery wheels, variable frequency drives, and enhanced filtration systems, addressing the growing demand for energy efficiency and improved indoor air quality.

The surge in commercial construction and infrastructure development worldwide, particularly in emerging economies, has significantly boosted demand for AHUs within this airflow range. These units effectively serve the needs of mid-sized buildings where air handling capacity must be balanced with energy consumption and operational costs. Furthermore, regulatory requirements focusing on energy efficiency and air quality are encouraging building owners to adopt AHUs in this range to comply with green building standards. Overall, the 5,001 – 15,000 m³/h segment’s combination of capacity, efficiency, and adaptability positions it as a leading force driving growth and innovation in the global AHU market.

Application Insights

Commercial segment dominated the Air Handling Units Market in 2024 and is projected to maintain its leadership throughout the forecast period, driven by the increasing demand for comfortable, healthy, and energy-efficient indoor environments in commercial buildings. This segment includes office complexes, shopping malls, hotels, hospitals, educational institutions, and airports, all of which require robust HVAC systems to ensure proper ventilation, temperature control, and air quality management. The growth of the commercial real estate market worldwide, fueled by urbanization and expanding business activities, is a major factor propelling the demand for AHUs in this sector.

Commercial buildings often house large numbers of occupants and sensitive equipment, making air quality and climate control critical for both health and productivity. AHUs in this segment are designed to handle significant air volumes and can be customized with advanced features such as high-efficiency filters, energy recovery systems, and smart controls to meet these requirements. Furthermore, the increasing adoption of green building standards like LEED and BREEAM in the commercial sector is encouraging the use of energy-efficient and environmentally friendly AHUs to reduce operational costs and carbon footprints.

Renovation and retrofit projects in existing commercial properties also contribute to the rising demand, as building owners seek to upgrade outdated HVAC systems to comply with modern energy codes and improve occupant comfort. With ongoing technological advancements and regulatory support, the commercial segment is expected to continue dominating the AHU market, reflecting its crucial role in shaping sustainable and healthy indoor environments across the globe.

Download Free Sample Report

Regional Insights

Largest Region

North America dominated the Air Handling Units Market in 2024 and is anticipated to maintain its leadership throughout the forecast period, driven by several key factors. The region's well-developed infrastructure, widespread adoption of advanced HVAC technologies, and stringent regulations on energy efficiency and indoor air quality have created a strong demand for sophisticated AHUs. Commercial buildings, healthcare facilities, educational institutions, and industrial complexes across the United States and Canada require reliable and high-performance air handling solutions to ensure occupant comfort and meet regulatory standards.

Government initiatives aimed at reducing energy consumption and greenhouse gas emissions, such as the U.S. Energy Star program and various state-level building codes, encourage the installation of energy-efficient AHUs equipped with features like heat recovery, variable frequency drives, and smart control systems. Additionally, the growing emphasis on green building certifications such as LEED drives demand for environmentally friendly and energy-saving HVAC solutions in the region.

Technological innovation is another major contributor to North America’s market dominance. Manufacturers in this region are investing heavily in R&D to develop smart AHUs integrated with IoT and predictive maintenance capabilities, allowing for better system management and lower operational costs. The COVID-19 pandemic has also heightened awareness of indoor air quality, increasing the demand for AHUs with advanced filtration and disinfection technologies.

Furthermore, the presence of a mature construction industry and substantial retrofit activities in older buildings contribute to steady market growth. Overall, North America’s combination of regulatory support, technological advancement, and infrastructure maturity ensures its continued leadership in the global AHU market.

Emerging Region

South America is an Emerging Region in the Air Handling Units Market in 2024 and is anticipated to maintain its leadership throughout the forecast period, driven by growing urbanization, industrialization, and infrastructure development across key countries like Brazil, Argentina, and Chile. The increasing construction of commercial buildings, hospitals, educational institutions, and industrial facilities is fueling demand for efficient HVAC systems, with AHUs playing a critical role in maintaining indoor air quality and thermal comfort. As more businesses and governments prioritize modernizing their infrastructure, the market for AHUs in South America is gaining momentum.

Several factors contribute to the region’s growth potential. Firstly, rising awareness of energy efficiency and environmental sustainability is encouraging the adoption of advanced AHU technologies that reduce energy consumption and operational costs. Governments and private sectors are beginning to implement regulations and incentives to promote green building practices, which further stimulate demand for energy-efficient air handling solutions.

Secondly, the growing focus on improving indoor air quality—especially in healthcare and commercial sectors—has accelerated the need for AHUs equipped with enhanced filtration and ventilation features. The COVID-19 pandemic heightened the importance of well-ventilated indoor spaces, prompting upgrades to existing HVAC systems and increasing investments in new AHUs.

Despite challenges such as economic fluctuations and limited technical expertise in some areas, the South American AHU market is poised for steady growth. Increasing foreign investments, infrastructure projects, and technological advancements are expected to drive market expansion. Overall, South America presents a promising opportunity for AHU manufacturers and service providers looking to capitalize on the region’s evolving HVAC needs.

Recent Developments

• In February 2024, Modine Manufacturing Company completed the acquisition of Scott Springfield Manufacturing, strengthening its air handling unit portfolio and broadening its reach into key sectors like hyperscale data centers, telecommunications, healthcare, and aerospace.
• In July 2024, Trane Technologies introduced the Climate Changer Magicube (CLCM) AHU, designed to overcome installation and maintenance difficulties commonly faced in modern building environments. 
• In October 2024, Daikin launched its latest innovation, the FWC-D 3x3 Cassette fan coil unit. This new model features a BLDC fan motor that reduces power consumption and lowers noise levels. It also offers "open protocol" control compatibility, allowing seamless integration with building management systems and other HVAC components. Available in two-panel configurations, the FWC-D 3x3 provides cooling capacities ranging from 6 to 9.7 kW and is part of Daikin’s extensive BLDC Cassette product lineup.
• In January 2025, Italian manufacturer Clivet introduced its new Large Evo PL air-source heat pumps designed for commercial buildings. The heat pump boasts a seasonal coefficient of performance of up to 4.17 and can deliver water temperatures as high as 60 degrees Celsius. When combined in series, these units can achieve a maximum system capacity of 1,660 kW, offering scalable and efficient heating solutions.

Key Market Players

• Daikin Industries Ltd.
• Carrier Corporation
• Trane Technologies plc
• Johnson Controls International plc
• Systemair AB
• FläktGroup
• Trox GmbH
• Lennox International Inc.

Report Scope:

In this report, the Global Air Handling Units Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Air Handling Units Market, By Type:

o   Packaged

o   Modular

o   Custom

o   DX Integrated

o   Low Profile (Ceiling)

o   Rooftop Mounted

o   Others       

• Air Handling Units Market, By Application:

o   Commercial

o   Residential      

• Air Handling Units Market, By Capacity:

o   ≤5,000 m3/h

o   5,001 – 15,000 m3/h

o   15,001 – 30,000 m3/h

o   30,001 – 50,000 m3/h

o   ≥50,001 m3/h    

• Air Handling Units Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   Asia Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   South America

§  Brazil

§  Colombia

§  Argentina

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Air Handling Units Market.

Available Customizations:

Global Air Handling Units Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

Global Air Handling Units Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]