HVAC and Plumbing Market Size, Share, Growth, and Industry Analysis, By Type (Heating, Ventilation and Cooling), By Application (Commercial, Industrial, Residential and Others), and Regional Insights and Forecast to 2035

•   
•   
  

  Download Free Sample to learn more about this report

    

HVAC AND PLUMBING MARKET OVERVIEW

The global HVAC and Plumbing market is anticipated to reach approximately USD 364.22 billion in 2026 and is projected to grow to around USD 574.85 billion by 2035, achieving an approximate CAGR of 5.6% between 2026 and 2035.

The global HVAC and Plumbing Market is experiencing significant transformation driven by increasing demand for energy‑efficient climate control and water systems. According to industry data, there are nearly 990,000 plumbing and HVAC contractor establishments in the U.S., employing around 400,000 HVACR mechanics and installers. The HVAC and Plumbing market is influenced by sustainable building initiatives, smart home integration, and water conservation trends. More than 75% of recent HVAC installations are energy‑efficient units, while smart plumbing fixtures with water‑savings are rising in adoption across residential and commercial sectors.

In the United States, the HVAC and Plumbing Market is particularly mature: as of 2025, there are over 117,000 HVAC contractor businesses, and the U.S. HVAC services segment is projected to hit USD 28.2 billion in size, with retrofit HVAC replacement accounting for more than 62% of equipment installs. In plumbing, U.S. contractors represent one of the largest pools with steady demand from residential remodels, commercial builds, and green building regulations.

Key Findings

COVID-19 IMPACT

HVAC and plumbing Industry Had a Negative Effect Due to Disruption in supply chain during COVID-19 Pandemic

The COVID-19 pandemic created multiple challenges which negatively affected the HVAC and plumbing market through broken supply chains and an absence of workers and delayed construction work resulting from lockdown limitations. In the early months of the pandemic the industry experienced falling market demand because builders cut down on projects and residents chose to postpone unnecessary remodeling activities. The increasing attention given to indoor air quality and hygiene created new direction in the HVAC sector for air purification solutions and ventilation system improvements and filtration methods to stop airborne virus transmission. The market for smart plumbing and touchless plumbing solutions increased rapidly in both healthcare facilities and commercial properties because organizations wanted better hygiene operations combined with decreased contact points.

The supply shortage of fundamental HVAC and plumbing components during pandemic times caused price hikes and protracted project durations. A lack of workers negatively affected both installation work and maintenance support in the industry. As economies unlocked for business the market recovery included a strengthened attention to energy-efficient and indoor air quality solutions and water conservation practices. Business operations and government entities spent money on HVAC system upgrades that followed health standard requirements while driving the need for premium ventilation and filtering systems. Smart innovation took off after the pandemic beginning by including IoT-enabled HVAC controls along with automated plumbing systems while the industry started to evolve towards monitoring health parameters and ecological sustainability and automation functions.

LATEST TREND

Integration of IoT and smart technology to Drive Market Growth

The HVAC and Plumbing Market is being reshaped by several rapid trends. Smart‑home integration is now widespread, with approximately 44% of new residential HVAC systems including IoT thermostats, remote sensors, or connected diagnostics. Retrofit work dominates, with around 62.5% of U.S. HVAC installs in 2024 being replacements rather than new builds, fueling aftermarket demand. Electrification is accelerating: in the U.S., heat pump shipments in 2024 exceeded 4.1 million units, outpacing gas furnaces by roughly 32%, signaling a sweeping shift toward electric heating.

On the plumbing side, eco‑friendly fixtures are gaining ground; many users now install water-saving systems that reduce consumption by over 13,000 gallons annually. Smart plumbing with leak detectors and real‑time consumption monitoring can reduce water waste by up to 50%, driving strong demand. Subscription‑style or maintenance‑contract plumbing services are emerging, with growing interest in recurring revenue models. These trends reflect how the HVAC and Plumbing Market is evolving: more than a third of service agreements now include connected diagnostics and predictive maintenance, while retrofit and replacement opportunities represent the lion’s share of new HVAC business. Sustainability is no longer a niche—it’s driving the design and deployment of both heating/cooling and plumbing systems.

•   
•   
  

  Download Free Sample to learn more about this report

    

HVAC AND PLUMBING MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Heating, Ventilation and Cooling

• Heating: In heating, the HVAC and Plumbing Market sees widespread use of electric heat pumps, gas furnaces, and boiler systems. As of 2024, heat pump shipments in the U.S. reached 4.1 million units, outpacing gas furnace installations. Heating installs are often combined with plumbing upgrades such as hydronic systems or radiant heating, which integrate with efficient plumbing components to improve thermal performance.

• Ventilation: Ventilation systems remain critical in the HVAC and Plumbing Market, especially in commercial and industrial settings. Approximately 38% of modern installations include digitally controlled ventilation with smart dampers, sensors, and air quality monitors. Demand for indoor air quality (IAQ) solutions is high: in office and public spaces, ventilation systems with connected CO₂ sensors and filter monitoring have grown by more than 29% year over year.

• Cooling: Cooling drives a large portion of HVAC demand. In the U.S., the southern and southwestern regions report some of the highest adoption rates, with over 5.5 million air‑conditioning units shipped annually in recent years. The HVAC and Plumbing Market for cooling is influenced by inverter-driven units, mini‑split systems, and smart thermostats. Cooling solutions are increasingly integrated with plumbing for chilled-water systems and condensate management in high-performance buildings.

By Application

Based on application, the global market can be categorized into Commercial, Industrial, Residential and Others

• Commercial: In commercial applications, the HVAC and Plumbing Market is strongly skewed toward energy efficiency and maintenance service contracts. More than 41% of HVAC service agreements globally originate from commercial clients, including offices, retail, and healthcare facilities. Plumbing in this segment is increasingly focusing on water-saving fixtures, smart leak detection, and back‑flow prevention to meet building code and sustainability requirements.

• Industrial: Within industrial applications, the HVAC and Plumbing Market supports manufacturing plants, data centers, and warehouses. Industrial customers demand large-scale chilling systems, high-capacity ventilation, and process plumbing. Smart plumbing devices in this sector include flow meters and automated valves, used by roughly 18% of industrial facilities, reducing water waste and increasing operational efficiency.

• Residential: In residential markets, the HVAC and Plumbing Market is dominated by retrofit and replacement work. About 62.5% of residential HVAC installations in 2024 in the U.S. were replacement systems. Homeowners are upgrading to smart thermostats, connected HVAC units, and energy-efficient heat pumps. On the plumbing side, over 50% of households are adopting water-efficient or IoT-enabled plumbing fixtures to cut bills and support sustainability.

MARKET DYNAMICS

Driving Factors

Urbanization and infrastructure modernization

Urbanization continues to account for a major portion of global construction expansion, with 57% of the world’s population living in urban areas in 2023 and projected to reach 60% by 2030. This rising urban density directly increases the demand for HVAC and plumbing installations across high-rise residential towers, commercial complexes, and institutional facilities. An estimated 42% of new buildings constructed in 2024 required advanced HVAC zoning systems and high-efficiency plumbing fixtures to meet modern occupancy and environmental standards. As smart cities expand globally, more than 30% of municipal infrastructure projects now include integrated HVAC optimization and water-conservation plumbing solutions.

Infrastructure modernization is also accelerating adoption, with over 65% of public building retrofit projects incorporating HVAC upgrades and water-efficient plumbing replacements. B2B buyers such as real estate developers, contractors, and facility managers report that nearly 50% of tenders issued in 2024 included mandatory requirements for energy-efficient heat pumps, VRF systems, and low-flow plumbing technology. Additionally, green building initiatives are influencing the market, with 38% of LEED-certified projects specifying water-conserving plumbing systems and enhanced ventilation performance. stricter building codes, adopted by more than 70% of urban jurisdictions, push commercial and industrial properties to invest in smarter HVAC automation and sustainable plumbing installations.

Restraining Factor

Regulatory compliance costs and raw materials volatility

Regulatory compliance remains a major restraint, with more than 60% of plumbing-fixture manufacturers reporting higher operational costs due to water-efficiency standards. Compliance with low-flow requirements for faucets, toilets, and valves has increased R&D spending by 27% across mid-sized manufacturers. Additionally, HVAC OEMs face regulatory pressure on refrigerant transitions, with over 55% of system redesign projects driven by new environmental mandates. These compliance burdens reduce profit margins and create cost-instability for B2B distributors and contractors who already operate under tight project budgets.

Raw material price volatility further challenges the sector, especially as brass, copper, and stainless steel account for up to 48% of total plumbing component costs. Global copper prices fluctuated by more than 22% in 2023, forcing frequent price adjustments across supply chains. Stainless steel cost variability impacted approximately 41% of commercial plumbing projects, causing delays or project re-scoping. Additionally, the HVAC labor market remains strained, with 34% of contractors reporting shortages of skilled technicians capable of installing VRF, heat pumps, and advanced control systems. This talent gap increases installation times by 18% on average, limiting market scalability.

Adoption of smart and water-efficient systems

Opportunity

Smart HVAC and water-efficient plumbing systems present one of the strongest growth opportunities, especially as 35% of new plumbing installations now use sensor-based or dual-flush fixtures. Smart water-management devices have reduced consumption in commercial buildings by up to 28%, making them a priority investment for B2B buyers. On the HVAC front, IoT-enabled systems grew by 29% in deployment across U.S. facilities, indicating rising interest in remote diagnostics, predictive maintenance, and energy-performance automation. Businesses deploying smart HVAC solutions report operational cost reductions of 19–22%, further strengthening adoption.Asia-Pacific remains a major opportunity hub, accounting for 48.6% of global plumbing-fixture demand, driven by rapid construction expansion. Smart building integration is rising, with over 44% of new commercial projects adopting connected HVAC systems. Environmental policies are also accelerating adoption: 52% of industrial buildings undergoing retrofit initiatives are now integrating water-saving plumbing systems and high-efficiency air-handling units. These opportunities allow manufacturers, service providers, and distributors to expand bundled service models that include maintenance, analytics, and upgrade cycles  already adopted by 31% of leading B2B facility-management firms.

Skilled labor shortage and retrofitting complexity

Challenge

The global shortage of skilled technicians remains a critical challenge, impacting installation timelines for advanced HVAC and plumbing systems. Approximately 39% of HVAC contractors report insufficient staffing to meet demand for VRF, heat pumps, and smart-control installations. Retrofitting complexity is increasing as more than 45% of existing buildings lack compatibility with modern high-efficiency systems, requiring additional piping, ducting, or structural modifications. These constraints slow commercial adoption, increasing project timelines by 20–25% in large-scale developments. B2B clients often deprioritize retrofits to avoid downtime and labor costs.Plumbing retrofits are equally challenging since over 50% of buildings older than 20 years require complete pipe restructuring to support modern sensor taps, water-saving toilets, and greywater-recycling systems. Retrofitting disruptions lead to 14–18% increases in project cost, discouraging property managers from full system upgrades. Furthermore, 32% of plumbing service firms report difficulty sourcing technicians trained in digital plumbing diagnostics and smart water-management systems. These issues collectively hinder modernization efforts, causing retrofit delays in nearly 37% of planned commercial projects across major markets.

•   
•   
  Download Free Sample to learn more about this report

    

HVAC AND PLUMBING MARKET REGIONAL INSIGHTS

North America

North America leads the HVAC and Plumbing Market with a dominant share. In the U.S., there are nearly 990,000 HVAC and plumbing contractor businesses, employing around 400,000 technicians, which underscores the massive scale of the service network. The U.S. residential HVAC services market reached USD 28.2 billion in 2025, with retrofits representing 62.5% of all HVAC system installs. Digital retail accounts for a major portion of HVAC equipment sales, while maintenance contracts drive recurring plumbing revenue.

Smart thermostats and IoT-enabled HVAC systems now represent around 44% of new residential installs. In plumbing, water-efficient fixtures and smart leak detection are adopted by more than 50% of households in urban regions. The fragmentation of the contractor base (with over 117,000 firms) presents ample opportunity for consolidation, recurring service agreements, and bundled HVAC‑plumbing solutions.

Europe

In Europe, the HVAC and Plumbing Market is strongly influenced by green building policies and water conservation initiatives. A significant portion of commercial and residential retrofits in Germany, France, and the UK now use low‑GWP refrigerants and high‑efficiency heat pumps. Ventilation systems with smart IAQ controls and heat-recovery ventilation (HRV) account for over 30% of modern installations.

On the plumbing front, eco‑friendly water-saving fixtures and dual-flush systems are increasingly common, rising by more than 40% over the past five years in major urban markets. The regulatory push for net-zero buildings accelerates both HVAC and plumbing upgrades, and modular plumbing systems tailored for small European apartments are growing in demand.

Asia

The Asia‑Pacific region is one of the fastest-growing markets for the HVAC and Plumbing Market. In 2023, more than 70 million residential HVAC units were shipped within Asia‑Pacific, driven by rapid urbanization, population growth, and rising disposable income. Countries such as China, India, Japan, and South Korea dominate demand, accounting for over 70% of regional HVAC volume. In plumbing, piped water infrastructure modernization and smart fixture adoption are expanding, particularly in mega‑cities.

Stackable and modular plumbing systems for high-rise apartments are increasingly common, with over 45% of new residential projects integrating water-efficient fixtures. The smart plumbing segment—featuring leak detection and real-time consumption tracking—is growing rapidly, helping the HVAC and Plumbing Market capture new B2B and residential opportunities.

Middle East & Africa

The Middle East & Africa region is emerging in the HVAC and Plumbing Market, with high demand for air conditioning due to the hot climate and increasing construction. Cooling systems represent a large share of HVAC installs, particularly in the GCC nations, where luxury real estate and commercial complexes often integrate central chillers and smart HVAC controls.

Vertical urbanization in cities like Dubai and Riyadh drives demand for space‑efficient HVAC and plumbing systems. On the plumbing side, sustainable water usage is increasingly critical: water-saving fixtures and recycling plumbing systems are being adopted by over 55% of new housing developments. Modular plumbing and stackable storage solutions are being implemented widely in multi-dwelling units, responding to both space constraints and climate challenges.

KEY INDUSTRY PLAYERS

Key Industry Players Shaping the Market Through Innovation and Market Expansion

Key industry players are shaping the HVAC and plumbing marketplace through strategic innovation and market expansion. These companies are introducing advanced techniques and processes to improve the quality and performance of their offerings. They are also expanding their product lines to include specialized variations, catering to diverse customer preferences. Additionally, they are leveraging digital platforms to increase market reach and enhance distribution efficiency. By investing in research and development, optimizing supply chain operations, and exploring new regional markets, these players are driving growth and setting trends within the HVAC and plumbing market.

List Of Top Hvac And Plumbing Companies

• Gree Electric Appliances, Inc. of Zhuhai [China]
• Johnson Controls International PLC [Ireland]
• Fujitsu Limited [Japan]
• Daikin Industries Ltd. [Japan]
• Ingersoll-Rand plc [U.S.]

Top two companies by market share:

• Daikin Industries Ltd.: holds approximately 18–22% of global HVAC shipments.
• Johnson Controls International PLC: holds approximately 14–18% share in global building HVAC and plumbing solutions.

Investment Analysis and Opportunities

Investment opportunities in the HVAC and Plumbing Market are strong due to multiple convergence trends. The shift toward energy-efficient HVAC systems presents recurring service and retrofit potential, particularly in regions where 62.5% of HVAC installs are replacements. Investors can tap into bundled service models, combining HVAC maintenance with plumbing upgrades—smart thermostats, leak detectors, and water-saving fixtures—to generate predictable, high-frequency cash flow.

Sustainability drives are creating green‑product lines: over 57% of consumers now prefer plumbing components made from sustainable materials, and firms are developing bamboo, recycled‑plastic, and low-carbon HVAC materials in response. Tech-enabled storage and inventory tracking for plumbing parts (via RFID or app) are gaining adoption, especially in commercial B2B settings, opening new opportunities to monetize after‑sales service.

Smart infrastructure presents a further opportunity: smart HVAC with predictive maintenance is deployed in more than 29% of service contracts, reducing downtime and lowering service costs while increasing customer retention. Meanwhile, B2B contracts with real estate developers and contractors, using modular and IoT‑enabled HVAC-plumbing systems, offer scalable deployment in residential, commercial, and industrial buildings. Given growing construction in Asia‑Pacific and retrofit demand in North America and Europe, investments in these segments can yield strong returns.

New Product Development

Innovation in the HVAC and Plumbing Market is accelerating around connectivity, efficiency, and sustainability. Manufacturers are launching smart HVAC units that integrate AI-based diagnostics and cloud monitoring, with nearly 30% of new units supporting remote system optimization. In plumbing, 23% of households are adopting smart fixtures such as sensor‑based taps, IoT-enabled leak detectors, and real-time water usage trackers.

In heating, heat pump technology is being enhanced with hybrid electric-gas systems and variable‑speed compressors, allowing for optimized performance in different climates. In ventilation, modular systems incorporate CO₂ sensors and demand-based operation, reducing energy use in crowded commercial buildings.

Eco-materials are being introduced: sustainable piping made from recycled plastics or composite materials is growing in production, while HVAC chassis and ductwork are being designed for disassembly and reuse, aligning with circular economy principles. Smart plumbing modules with app integration now allow homeowners to track water quality, flow, and leaks, driving product differentiation. These innovations reflect the intense focus on intelligent, green, and integrated solutions in the HVAC and Plumbing Market.

Five Recent Developments (2023‑2025)

• Daikin launched a new IoT‑enabled HVAC series in early 2024 with integrated cloud diagnostics and remote fault reporting, resulting in over 21% reduction in service churn.
• Johnson Controls rolled out a modular heat‑recovery ventilation system in late 2023, adopted by over 5,000 commercial buildings in Europe by mid‑2025.
• LG Electronics introduced a smart plumbing fixture in mid‑2024 that monitors water use and leaks, achieving over 30% adoption in new residential projects in South Korea.
• Midea Group expanded its service portfolio in 2023 by adding predictive maintenance contracts to its HVAC installations, securing more than 10,000 recurring clients.
• In 2025, Mitsubishi Electric launched a sustainable HVAC line using recycled-metal chassis and low‑GWP refrigerant, adopted in over 4,000 units across Asia-Pacific.

REPORT COVERAGE

This HVAC and Plumbing Market Market Research Report provides comprehensive coverage of global HVAC‑plumbing systems, including both equipment and service sectors. The report includes more than 300 data tables and charts showing installation volumes, service contract penetration, and technology adoption across heating, ventilation, cooling, and plumbing. It dissects market segmentation by type (heating, ventilation, cooling) and by application (commercial, industrial, residential) to provide detailed analysis.

The regional outlook covers North America, Europe, Asia‑Pacific, and Middle East & Africa, with share‑by‑region data showing HVAC installer concentration, water fixture trends, and contractor density. The report also analyzes the competitive landscape, profiling more than 20 leading companies, with benchmarking of product innovation, market share, and go‑to‑market models. Finally, the document outlines investment opportunities, SWOT analysis, and five‑year projection scenarios, making it valuable for B2B stakeholders, manufacturers, contractors, and investors seeking insights into the HVAC and Plumbing Market Market Size, Market Share, Market Trends, Market Insights, Market Growth, Market Outlook, and Market Opportunities.