Commercial Air Conditioner Market Size and Outlook 2031

Report Description

Forecast Period	2027-2031
Market Size (2025)	USD 43.12 Billion
CAGR (2026-2031)	5.81%
Fastest Growing Segment	VRF Systems
Largest Market	North America
Market Size (2031)	USD 60.51 Billion

Market Overview

The Global Commercial Air Conditioner Market will grow from USD 43.12 Billion in 2025 to USD 60.51 Billion by 2031 at a 5.81% CAGR. Commercial air conditioners consist of high-capacity climate control systems designed to regulate temperature and air quality in non-residential structures including office complexes, industrial plants, and retail centers. The primary drivers fueling market expansion involve rapid global urbanization and the continuous development of commercial infrastructure which necessitates reliable HVAC solutions for operational efficiency. Furthermore, stringent government regulations concerning energy consumption compel facility owners to replace aging infrastructure with compliant and energy-efficient units, thereby sustaining demand for new installations and retrofits.

However, the market confronts a significant challenge regarding economic instability and high interest rates which can delay capital-intensive construction projects. This financial pressure often leads to postponed investments in building upgrades and new developments. According to the Air-Conditioning, Heating, and Refrigeration Institute, in 2025, the year-to-date shipments of central air conditioners and air-source heat pumps totaled 7,341,285 units, representing a 19.9 percent decline compared to the same period in the previous year. This substantial decrease underscores the immediate impact of broader economic headwinds on industry performance.

Key Market Drivers

The surging demand for data center and server room cooling has become a primary catalyst for market growth, driven by the exponential rise of artificial intelligence. As high-density computing generates immense heat, facility operators are upgrading to precision liquid cooling solutions to ensure operational stability. This shift boosts order books for manufacturers addressing specialized thermal management needs. For instance, according to Facilities Dive, November 2025, in an analysis of quarterly performance, Johnson Controls reported that its order backlog rose to nearly $15 billion, a growth trajectory heavily attributed to its expanding data center cooling business in the Americas. This trend highlights how the critical need for thermal efficiency in digital infrastructure is reshaping commercial HVAC strategies.

The transition toward low-GWP refrigerants and sustainable technologies is also reshaping product development. Stringent regulations compel building owners to retire obsolete systems in favor of units utilizing refrigerants like R-32, which offer reduced global warming potential. Manufacturers are capitalizing on this push by introducing advanced systems that align with climate targets. According to Daikin Industries, May 2025, in their Financial Results for Fiscal 2024, the company achieved record sales of ¥4.395 trillion, driven by demand for commercial VRV systems using low-GWP refrigerants. Broader market strength is further evidenced by recent financial performance; according to Carrier Global Corporation, in 2025, full-year sales reached $22.5 billion, reflecting sustained appetite for advanced climate solutions.

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Key Market Challenges

Economic instability and elevated interest rates constitute a substantial barrier to the growth of the Global Commercial Air Conditioner Market. As the cost of borrowing increases, financing for capital-intensive construction projects—such as new office complexes, retail centers, and industrial facilities—becomes significantly more expensive. Consequently, real estate developers and facility owners frequently postpone or cancel planned developments and major retrofitting initiatives to preserve capital. This financial hesitation directly reduces the immediate demand for commercial HVAC systems, as the procurement and installation of these units are inextricably linked to the progress of new building construction and infrastructure upgrades.

This contraction in the construction pipeline is substantiated by recent industry data indicating a sustained slowdown in pre-construction activity. According to the American Institute of Architects, in November 2025, the Architecture Billings Index recorded a score of 45.3, marking the thirteenth consecutive month of declining billings at architecture firms. Since architecture billings are a leading economic indicator for non-residential construction activity with a lead time of nine to twelve months, this persistent decline signals a continued reduction in future commercial building projects. Such a trend confirms that broader economic headwinds are actively constraining the construction sector, thereby limiting the volume of new commercial air conditioning installations entering the market.

Key Market Trends

The accelerated shift toward commercial heat pump electrification is redefining the market as facility owners prioritize decarbonization over traditional fossil fuel-based heating. This transition is not merely regulatory but operational, as electric heat pumps offer dual heating and cooling capabilities that streamline asset management and reduce direct emissions. The momentum is evident in recent market performance; according to the European Heat Pump Association, October 2025, in the article 'Heat pump sales up 9% in 2025 so far', sales across 13 European markets increased by 9 percent in the first half of the year compared to the same period in 2024, signaling a robust recovery and growing adoption of electrified thermal technologies.

The integration of AI-driven predictive maintenance models is simultaneously transforming business models from reactive repairs to proactive lifecycle management. By leveraging IoT-enabled sensors, manufacturers are now offering digital services that anticipate equipment failures and optimize energy usage in real-time, thereby securing high-margin recurring revenue streams. This operational pivot is substantiated by recent financial metrics; according to Facilities Dive, February 2025, in the article 'Johnson Controls' North American orders grew 18% in first quarter', the company achieved a 10 percent year-over-year increase in service orders, reflecting the critical value facility operators place on advanced, digitally enhanced maintenance ecosystems.

Segmental Insights

The Variable Refrigerant Flow Systems segment represents the fastest growing category in the Global Commercial Air Conditioner Market, driven by the increasing demand for energy-efficient zoning solutions. These systems allow commercial facilities to control temperatures independently across multiple rooms, which minimizes energy waste and lowers utility expenses. This adoption is accelerated by rigorous efficiency standards established by regulatory bodies like the U.S. Department of Energy, compelling businesses to upgrade infrastructure. Consequently, the ability to combine operational flexibility with compliance to environmental mandates positions VRF technology as the preferred choice for modern commercial developments.

Regional Insights

North America leads the Global Commercial Air Conditioner Market due to a mature commercial real estate sector and increasing investments in energy-efficient infrastructure. The region’s dominance is largely driven by stringent energy consumption mandates enforced by the United States Department of Energy and performance standards established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. These regulatory frameworks necessitate the replacement of older systems with compliant units, fostering consistent demand. Consequently, the convergence of strict institutional guidelines and sustained commercial construction activity solidifies North America as the principal market for commercial cooling solutions.

Recent Developments

In December 2024, Mitsubishi Electric Corporation announced a capital investment of $143.5 million to retrofit a manufacturing facility in Maysville, Kentucky, for the production of variable-speed compressors. This strategic initiative aims to support the growing demand for energy-efficient heat pump systems in the United States commercial and residential markets. The factory is scheduled to begin producing these key components in October 2027, marking a significant localization of the company's supply chain. This development strengthens the company's capacity to deliver low-carbon HVAC solutions to its commercial customers and reduces reliance on imported components.
In August 2024, Daikin Applied introduced the next generation of its self-contained HVAC system, the Model SWP J-Vintage, which is engineered to support decarbonization in commercial facilities. This new unit features the low-global warming potential R-32 refrigerant and is specifically designed to meet the requirements of floor-by-floor applications in office buildings and retrofits. The system offers a cost-effective and highly efficient solution that helps customers reduce their carbon footprint while maintaining superior performance. This product launch underscores the company's ongoing effort to provide advanced, environmentally responsible technologies within the Global Commercial Air Conditioner Market.
In July 2024, Johnson Controls International plc entered into a definitive agreement to sell its Residential and Light Commercial HVAC business to the Bosch Group in an all-cash transaction valued at $8.1 billion. This strategic divestiture allows the company to simplify its portfolio and transform into a pure-play provider of comprehensive solutions specifically for commercial buildings. The transaction includes the North America Ducted business and a global joint venture with Hitachi, Ltd. By sharpening its focus, the company intends to enhance its offering of digital and sustainable technologies for commercial infrastructure, directly impacting its standing in the global market.
In January 2024, LG Electronics unveiled its latest Variable Refrigerant Flow (VRF) solution, the Multi V i, specifically designed for mid- to high-rise commercial buildings. Showcased at the AHR Expo, this advanced system incorporates the company's proprietary AI engine to analyze operational data, thereby enhancing energy efficiency and providing smart diagnostic functions. The launch highlighted the company's commitment to delivering sustainable heating and cooling technologies for the commercial sector. By utilizing intelligent climate control features, the system aims to improve comfort levels and operational management for building owners and facility managers in the global commercial air conditioner market.

Key Market Players

Carrier Global Corp.
Daikin Industries Ltd.
Danfoss AS
Emerson Electric Co.
Fujitsu Ltd.
Haier Smart Home Co. Ltd.
Hitachi Ltd.
Honeywell International Inc.
Johnson Controls International Plc.
Lennox International Inc.

By Product Type	By Application	By Region
Split Systems VRF Systems Chillers Packaged Air Conditioners Others	Offices & Buildings Hospitality Supermarket/Hypermarket Transportation Healthcare Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

Commercial Air Conditioner Market, By Product Type:

Split Systems
VRF Systems
Chillers
Packaged Air Conditioners
Others

Commercial Air Conditioner Market, By Application:

Offices & Buildings
Hospitality
Supermarket/Hypermarket
Transportation
Healthcare
Others

Commercial Air Conditioner Market, By Region:

North America

United States
Canada
Mexico

Europe

France
United Kingdom
Italy
Germany
Spain

Asia Pacific

China
India
Japan
Australia
South Korea

South America

Brazil
Argentina
Colombia

Middle East & Africa

South Africa
Saudi Arabia
UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Commercial Air Conditioner Market.

Available Customizations:

Global Commercial Air Conditioner Market report with the given market data, TechSci 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 Commercial Air Conditioner 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]

Table of content

1. Product Overview

1.1. Market Definition

1.2. Scope of the Market

1.2.1. Markets Covered

1.2.2. Years Considered for Study

1.2.3. Key Market Segmentations

2. Research Methodology

2.1. Objective of the Study

2.2. Baseline Methodology

2.3. Key Industry Partners

2.4. Major Association and Secondary Sources

2.5. Forecasting Methodology

2.6. Data Triangulation & Validation

2.7. Assumptions and Limitations

3. Executive Summary

3.1. Overview of the Market

3.2. Overview of Key Market Segmentations

3.3. Overview of Key Market Players

3.4. Overview of Key Regions/Countries

3.5. Overview of Market Drivers, Challenges, Trends

4. Voice of Customer

5. Global Commercial Air Conditioner Market Outlook

5.1. Market Size & Forecast

5.1.1. By Value

5.2. Market Share & Forecast

5.2.1. By Product Type (Split Systems, VRF Systems, Chillers, Packaged Air Conditioners, Others)

5.2.2. By Application (Offices & Buildings, Hospitality, Supermarket/Hypermarket, Transportation, Healthcare, Others)

5.2.3. By Region

5.2.4. By Company (2025)

5.3. Market Map

6. North America Commercial Air Conditioner Market Outlook

6.1. Market Size & Forecast

6.1.1. By Value

6.2. Market Share & Forecast

6.2.1. By Product Type

6.2.2. By Application

6.2.3. By Country

6.3. North America: Country Analysis

6.3.1. United States Commercial Air Conditioner Market Outlook

6.3.1.1. Market Size & Forecast

6.3.1.1.1. By Value

6.3.1.2. Market Share & Forecast

6.3.1.2.1. By Product Type

6.3.1.2.2. By Application

6.3.2. Canada Commercial Air Conditioner Market Outlook

6.3.2.1. Market Size & Forecast

6.3.2.1.1. By Value

6.3.2.2. Market Share & Forecast

6.3.2.2.1. By Product Type

6.3.2.2.2. By Application

6.3.3. Mexico Commercial Air Conditioner Market Outlook

6.3.3.1. Market Size & Forecast

6.3.3.1.1. By Value

6.3.3.2. Market Share & Forecast

6.3.3.2.1. By Product Type

6.3.3.2.2. By Application

7. Europe Commercial Air Conditioner Market Outlook

7.1. Market Size & Forecast

7.1.1. By Value

7.2. Market Share & Forecast

7.2.1. By Product Type

7.2.2. By Application

7.2.3. By Country

7.3. Europe: Country Analysis

7.3.1. Germany Commercial Air Conditioner Market Outlook

7.3.1.1. Market Size & Forecast

7.3.1.1.1. By Value

7.3.1.2. Market Share & Forecast

7.3.1.2.1. By Product Type

7.3.1.2.2. By Application

7.3.2. France Commercial Air Conditioner Market Outlook

7.3.2.1. Market Size & Forecast

7.3.2.1.1. By Value

7.3.2.2. Market Share & Forecast

7.3.2.2.1. By Product Type

7.3.2.2.2. By Application

7.3.3. United Kingdom Commercial Air Conditioner Market Outlook

7.3.3.1. Market Size & Forecast

7.3.3.1.1. By Value

7.3.3.2. Market Share & Forecast

7.3.3.2.1. By Product Type

7.3.3.2.2. By Application

7.3.4. Italy Commercial Air Conditioner Market Outlook

7.3.4.1. Market Size & Forecast

7.3.4.1.1. By Value

7.3.4.2. Market Share & Forecast

7.3.4.2.1. By Product Type

7.3.4.2.2. By Application

7.3.5. Spain Commercial Air Conditioner Market Outlook

7.3.5.1. Market Size & Forecast

7.3.5.1.1. By Value

7.3.5.2. Market Share & Forecast

7.3.5.2.1. By Product Type

7.3.5.2.2. By Application

8. Asia Pacific Commercial Air Conditioner Market Outlook

8.1. Market Size & Forecast

8.1.1. By Value

8.2. Market Share & Forecast

8.2.1. By Product Type

8.2.2. By Application

8.2.3. By Country

8.3. Asia Pacific: Country Analysis

8.3.1. China Commercial Air Conditioner Market Outlook

8.3.1.1. Market Size & Forecast

8.3.1.1.1. By Value

8.3.1.2. Market Share & Forecast

8.3.1.2.1. By Product Type

8.3.1.2.2. By Application

8.3.2. India Commercial Air Conditioner Market Outlook

8.3.2.1. Market Size & Forecast

8.3.2.1.1. By Value

8.3.2.2. Market Share & Forecast

8.3.2.2.1. By Product Type

8.3.2.2.2. By Application

8.3.3. Japan Commercial Air Conditioner Market Outlook

8.3.3.1. Market Size & Forecast

8.3.3.1.1. By Value

8.3.3.2. Market Share & Forecast

8.3.3.2.1. By Product Type

8.3.3.2.2. By Application

8.3.4. South Korea Commercial Air Conditioner Market Outlook

8.3.4.1. Market Size & Forecast

8.3.4.1.1. By Value

8.3.4.2. Market Share & Forecast

8.3.4.2.1. By Product Type

8.3.4.2.2. By Application

8.3.5. Australia Commercial Air Conditioner Market Outlook

8.3.5.1. Market Size & Forecast

8.3.5.1.1. By Value

8.3.5.2. Market Share & Forecast

8.3.5.2.1. By Product Type

8.3.5.2.2. By Application

9. Middle East & Africa Commercial Air Conditioner Market Outlook

9.1. Market Size & Forecast

9.1.1. By Value

9.2. Market Share & Forecast

9.2.1. By Product Type

9.2.2. By Application

9.2.3. By Country

9.3. Middle East & Africa: Country Analysis

9.3.1. Saudi Arabia Commercial Air Conditioner Market Outlook

9.3.1.1. Market Size & Forecast

9.3.1.1.1. By Value

9.3.1.2. Market Share & Forecast

9.3.1.2.1. By Product Type

9.3.1.2.2. By Application

9.3.2. UAE Commercial Air Conditioner Market Outlook

9.3.2.1. Market Size & Forecast

9.3.2.1.1. By Value

9.3.2.2. Market Share & Forecast

9.3.2.2.1. By Product Type

9.3.2.2.2. By Application

9.3.3. South Africa Commercial Air Conditioner Market Outlook

9.3.3.1. Market Size & Forecast

9.3.3.1.1. By Value

9.3.3.2. Market Share & Forecast

9.3.3.2.1. By Product Type

9.3.3.2.2. By Application

10. South America Commercial Air Conditioner Market Outlook

10.1. Market Size & Forecast

10.1.1. By Value

10.2. Market Share & Forecast

10.2.1. By Product Type

10.2.2. By Application

10.2.3. By Country

10.3. South America: Country Analysis

10.3.1. Brazil Commercial Air Conditioner Market Outlook

10.3.1.1. Market Size & Forecast

10.3.1.1.1. By Value

10.3.1.2. Market Share & Forecast

10.3.1.2.1. By Product Type

10.3.1.2.2. By Application

10.3.2. Colombia Commercial Air Conditioner Market Outlook

10.3.2.1. Market Size & Forecast

10.3.2.1.1. By Value

10.3.2.2. Market Share & Forecast

10.3.2.2.1. By Product Type

10.3.2.2.2. By Application

10.3.3. Argentina Commercial Air Conditioner Market Outlook

10.3.3.1. Market Size & Forecast

10.3.3.1.1. By Value

10.3.3.2. Market Share & Forecast

10.3.3.2.1. By Product Type

10.3.3.2.2. By Application

11. Market Dynamics

11.1. Drivers

11.2. Challenges

12. Market Trends & Developments

12.1. Merger & Acquisition (If Any)

12.2. Product Launches (If Any)

12.3. Recent Developments

13. Global Commercial Air Conditioner Market: SWOT Analysis

14. Porter's Five Forces Analysis

14.1. Competition in the Industry

14.2. Potential of New Entrants

14.3. Power of Suppliers

14.4. Power of Customers

14.5. Threat of Substitute Products

15. Competitive Landscape

15.1. Carrier Global Corp.

15.1.1. Business Overview

15.1.2. Products & Services

15.1.3. Recent Developments

15.1.4. Key Personnel

15.1.5. SWOT Analysis

15.2. Daikin Industries Ltd.

15.3. Danfoss AS

15.4. Emerson Electric Co.

15.5. Fujitsu Ltd.

15.6. Haier Smart Home Co. Ltd.

15.7. Hitachi Ltd.

15.8. Honeywell International Inc.

15.9. Johnson Controls International Plc.

15.10. Lennox International Inc.

16. Strategic Recommendations

17. About Us & Disclaimer

Report Description

Table of content

Figures and Tables

Frequently asked questions

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