An Economic Analysis of the U.S. HVACR Equipment and Water Heater Manufacturing Industry

Executive Summary

This report presents an economic analysis of the domestic heating, ventilation, air conditioning, commercial refrigeration (HVACR) equipment and water heater manufacturing industry. The study provides information on recent trends within the industry, along with its contributions to the U.S. economy in 2021.

The scope was defined using relevant shares of economic data to analyze manufacturing activity of:
• Fans and Air Purification Equipment
• Heating Equipment
• AC and Refrigeration Equipment
• Water Heaters

Sales of HVACR equipment and water heaters grew moderately in 2018 and 2019. A mild contraction in 2020 highlighted the resilience of the industry during a period of pandemic-related turmoil and uncertainty. Sales rebounded in 2021 as normal conditions resumed. As defined in this study, sales grew by an average annual rate of 3.4% between 2017 and 2021.

Following an extended period of job reductions, the industry began adding jobs following the Great Recession of 2008-2009. This trend continued in recent years, with employment increasing by more than ten thousand between 2017 and 2021; total jobs in the industry increased from 125.9 thousand to 137.3 thousand over this span.

 This report measures three types of economic activity associated with HVACR equipment and water heater manufacturers:
1. Direct Impacts - Activity generated within the focus industry. In this case, the manufacturing of HVACR equipment and water heaters serves as the direct impact.
2. Indirect Impacts - Activity generated in other industries due to purchases (materials, energy, and services) by the focus industry through their supply chains.
3. Induced Impacts - Activity generated by spending linked to income earned from direct and indirect production.

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