AIR CONDITIONING SYSTEMS MARKET ANALYSIS

Air Conditioning Systems Market Size and Trends

Global air conditioning systems market is estimated to be valued at USD 129.36 Bn in 2025 and is expected to reach USD 221.85 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 8.0% from 2025 to 2032.

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Growing adoption of smart homes integrated with IoT-enabled HVAC systems can drive the market growth. Manufacturers are focusing on developing cost-effective and eco-friendly air conditioning solutions. However, high installation and maintenance cost may limit the large-scale adoption of air conditioning systems in the developing economies.

Rising temperatures and urbanization

With rising global temperatures due to climate change, there has been increase in need for effective air conditioning solutions. Heat waves and warm summers have become more frequent and intense in many parts of the world. Urban dwellers are particularly susceptible to extreme heat due to the heat island effect, which causes cities to experience significantly higher temperatures compared to surrounding rural areas. The abundance of concrete infrastructure in densely populated urban areas causes these cities to absorb and retain heat, resulting in temperatures that are several degrees higher than the surrounding rural regions. This uncomfortable heat can boost demand for home and commercial air conditioners.

Most urban centers across the world are expanding rapidly as more people migrate to cities for better job opportunities and standard of living. Growing urban population converts green spaces into constructed surfaces, thus, boosting urban heat island effect.

For instance, in September 2021, researchers at Arizona State University discovered that the waste heat released from air conditioning systems had significantly amplified the urban heat island effect by increasing the mean nighttime temperature by 1-1.5°C, thus, intensifying the urban surface temperature.