NEWS RELEASE AUGUST 2015
Oil Price and China Stock Market Plunges Will Impact the Air Filtration and Purification Market
The market for air filters used for residential, commercial and industrial HVAC applications will grow by over 14 percent from 2015 to 2019 at oil prices of $80/barrel during the period and Chinese economic growth of 7 percent per annum. At $40/barrel and no growth in China the air filter world growth will only be 7.6 percent. These are the latest forecasts in Air Filtration and Purification World Marketpublished by the McIlvaine Company.
There are a number of variables which will determine the growth for the air filter market. New insights are continually generated which justify changes in the forecasts. The Iran nuclear agreement is just one example. The plunging economy in China and the plunge in oil prices to $40/barrel are the most significant.
Lower oil prices will result in more air filters for gas turbines and, therefore, the power sector of the air filter market would benefit from low oil prices.
China represents 10 percent of the total world air filter market, therefore, changes in the forecasts for this country will significantly impact the total market. If the Chinese economy were to sink to a zero growth rate, air filter sales would fall by 17 percent over a four-year period. If the economy continues to grow at 7%/yr. then Chinese air filter sales in 2019 will be 33 percent higher than in 2015.
The plunge in oil prices will drive down the price of fibers used in air filters. So this will negatively impact the revenues of filter media people but increase margins as they pass along only a portion of the raw material savings.
Some of these developments are more predictable than others. The low oil prices lead to lower extraction activity which eventually leads to shortages and higher prices. On the other hand, the Chinese economy, wars, oil spills and earthquakes cannot be easily predicted. As a result, there will be the need for continuous changes in the forecasts to take into account the surprises.
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