In 2001, the UK market for heating, ventilating and air-conditioning equipment was valued at £1.81bn, an increase of 3.7 percent on the figure for the previous year. The heating-equipment sector accounts for the majority of sales; smaller shares are taken by air-conditioning equipment and by ventilation and air-distribution equipment.

The heating-equipment sector comprises domestic heating (including boilers, radiators and pumps) and commercial heating (including radiators, heat emitters, convectors and commercial boilers). The domestic subsector continues to grow at a modest rate, reflecting the stable demand for new building and the underlying demand for replacement equipment generated by the high level of ownership. The commercial subsector has experienced slower growth, since industrial investment is lower and the sector is under threat from integrated heating, ventilating and air-conditioning systems and from combined heat and power (CHP) systems. In addition, replacement demand in the commercial subsector is limited, as users often find it considerably cheaper to repair existing equipment than to buy new equipment.

The air-conditioning sector continues to show reasonable growth, with strong increases in sales of packaged air-conditioning units, driven by a combination of new installations and installations in existing premises. The price of packaged systems has been eroded in recent years, making these systems more attractive, while the UK's shift to a service-based economy has increased the requirement for air conditioning in general.

Demand for ventilation and air-distribution equipment was motivated by changes in building regulations throughout the 1990s, but commercial and industrial demand for these products is now under threat. Demand in the industrial sector is threatened by a lack of investment and growth in the sector as a whole, while commercial demand is threatened by the growth in the use of air-conditioning systems.

The heating, ventilating and air-conditioning market as a whole is influenced mainly by the building and construction market, which has been relatively stable in recent years. This stability is likely to continue, although the emphasis may shift from the private commercial sector, which showed good growth in the late 1990s, to the public health and education sectors, where the Government has pledged significant capital investment over the next few years.

Other important influences include the environment, with pressure from governments around the world and local environmental groups driving manufacturers to produce more efficient systems. Energy-saving features and reduced emissions are key areas for product development.