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As high summer temperatures take hold in the region, the focus has again fallen on air conditioning system options. Alison Luke investigates how the sector is coping with ever increasing market demands.

In 2007 the worldwide air conditioning market was valued at US $62 billion (AED227.6 billion). A rise from the reported $55 billion value in 2006, the Middle East, Africa and India market accounted for $5 billion of this total, with the sector's value in these countries continuing to grow.

Increased construction work and a move towards sustainable standards of building are among the factors affecting the sector, with air conditioning manufacturers adapting to meet the changing needs.

The latest World Market for Air Conditioning report from the UK-based Building Services Research and Information Association (BSRIA) highlights many of the recent changes and offers predictions for the future of the industry.

The constant demand for replacement and upgrade of existing units combined with the construction of new buildings are fuelling new demand for air conditioning plant reports BSRIA. Further boosts to the sector include a reduction in trade barriers, high oil prices driving inward investment and strong direct foreign investment desiring to engage with the region's dynamic growth markets.

"The Middle East [air conditioning] market is growing rapidly; compared to 2007 it has grown approximately 15%. Compared to the rest of the world [this growth] would be approximately 5%," states LG Electronics Gulf general manager air conditioning division Chris Ahn. "There is a lot of scope in this market," he adds.

The UAE, with Dubai and Abu Dhabi in particular, is heading this rising demand, but other countries within the region are closing fast. "If you look at the five-year period up to 2008, Dubai has seen the biggest growth in the Middle East; but if you look forward for the next five to ten years there are other regions that in terms of growth rate will probably overtake Dubai," states Pramod Parasramka, UTS Carrier marketing manager Middle East, building systems and services section.

Growth is expected in several countries throughout the region, but some are progressing at faster rates than others. "Saudi Arabia and Iran's growth are the highest in the region at 25%, while the UAE, Oman and Qatar are increasing by 15%," explains Panasonic Marketing Middle East product manager AC Abby Thomas.

We are seeing Saudi as the next big thing [in terms of market growth]," agrees Trane Middle East, Africa, India marketing manager Peter Blanchflower, "but Abu Dhabi, Qatar, India and Turkey are also exhibiting strong growth. In addition, parts of Africa are exhibiting signs of stability and growth," he reports.

The number of projects planned for these countries is as important as their scale stresses Parasramka, with six economic cities planned for Saudi Arabia alone and an investment of close of $100 billion in the Kingdom's construction industry.

Around 85% of all air conditioning products sold in the UAE are for residential applications reports BSRIA, with this trend following throughout the region. "Residential is the biggest market for air conditioning currently, with many international sub-developers coming into this region," states Ahn. "There is increasing demand for the energy efficient systems; also with the vertical growth [of buildings] there is demand for air conditioning systems that have flexibility in the refrigerant piping elevation between outdoor and indoor units," he reports.

Market changes

BSRIA reports that the global residential and light commercial market increased by around 14% to a value of $39 billion between 2006 and 2007, with mini-splits accounting for the largest proportion of this sector. The market for mini-split products rated at more than 5kW is expected to grow by 10% by 2011.

"In the split air conditioner/purifier market the Middle East is leading the way with 20% growth," states Thomas. "This compares to 15% [growth] in India, China, Brazil and Russia; and only 5% in Europe, the USA and Asia. "The Middle East is also experiencing 15% growth in ducted and large room air conditioners," Thomas adds.

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