Anticipated Surge in European Construction Activities Coupled With Focus on Energy-Efficiency Expected to Propel Growth of Pumps in Commercial Building Services
Accommodative monetary policy and low interest rates by the European Central Bank (ECB) coupled with increasing investments by Chinese investors in Central and Eastern Europe had aided the resurgence of European economy in 2017. As part of China’s ‘One Belt One Road’ (OBOR) project, the 16 Plus 1 initiative has made investments of $3 billion and plans to invest further in Central and Eastern European countries. In addition, the outcome of the Brexit referendum further strengthened the rest of the countries in Europe in terms of trade, investment, and monetary policies; this resulted in the fastest GDP growth rate in the European economy since 2007, an increase by 2.5% Y-o-Y, surpassing a 2.3% growth rate in the United States. Central and Eastern European countries were key contributors for this positive growth rate. European commercial buildings were one of the key benefactors of the recovering economy and attracted an investment of €47.4 billion from various investors until Q3 2017, despite geopolitical uncertainties in Europe. In addition, the European commercial building industry witnessed large transactions coupled with corporate mergers and acquisitions, indicative of strong growth opportunities. Increasing investment in the commercial building industry is subsequently driving demand for pumps in building applications such as heating, ventilation, and air conditioning (HVAC), pressure boosting, drainage and sewage, and fire protection. Furthermore, increased need to revamp existing infrastructure such as office complexes, apartments, shopping malls, sports stadiums, universities, school buildings, hospitals, and hotels has boosted demand for pumps, as more than 30% of the buildings in Europe are over 45 years old. Refurbishment and replacement activities in old building applications will further drive demand for commercial pumps.
Furthermore, with energy consumption being greater than 40% of the total European energy consumption, building services is one the largest energy consuming industries. As a result, Europe’s legislation concerning energy-efficient policies aims to reduce energy consumption in building services drastically by 2020. The goal of the Energy Performance of Buildings Directive is, to make all new buildings reduce to net zero-energy by the end of 2020. A Net-zero Energy Building (NZEB) is a building which produces the same amount of renewable energy as the overall energy consumption of the building. European countries such as the United Kingdom, France, and Germany have been mandated to set minimum energy performance requirements for new buildings, execute inspection schemes for HVAC systems, and refurbish existing systems. Thus, the strict regulations mandated by the government have increased the need for energy-efficient pumps in building applications. Hence, end users of pumps involved with building services such as commercial builders, original equipment manufacturers (OEM), engineering procurement and construction (EPC) companies, along with technical consultants are constantly seeking pumping solutions that are energy-efficient. With the advent of the Industrial Internet of Things (IIoT), pump manufacturers are embracing IIoT technologies, such as cognitive computing and real-time data analytics to increase the lifespan of pumps, albeit at a slower rate.
Pump manufacturers are already collaborating with software simulation providers to use digital twin technology to provide end users with smart pump solutions. For instance, Flowserve Corporation, a leading manufacturer of flow control equipment, is collaborating with simulation software provider, ANSYS, to implement the concept of digital twin technology for its pumps and pumping solutions. Digital twin technology enables pump end-users to create a virtual copy of the operational conditions of the actual pump. This helps end users to remotely monitor and analyze real-time operational data of the pump. Smart and energy-efficient pumps will enable data sharing and assist in real-time control of HVAC temperature, flow, and pressure. With transforming technologies accompanied by changes in the requirements of end users, pump manufacturers are constantly innovating to enhance quality as well as features.
In conclusion, the global pumps market in commercial building services is driven by growing urbanization, environmental regulations, and the need for better commercial infrastructure in most of Europe. Continued investment in the European commercial buildings market will lead to an increased number of commercial buildings, subsequently driving the pump market. In addition, refurbishment and replacement of old pumps in existing infrastructure will aid growth. Finally, a focus on energy-efficiency systems and green building will drive manufacturers to produce smarter pumps that have enhanced energy-efficient features and are compatible with current IIoT technologies. Given the current scenario of the pump market, there is an increased interest in the pumps market by commercial builders, OEMs, EPC companies, and technical consultants that want to have an overview of the market growth, trends, and technological advancements in the pump market. Hence, this creates a need for a market intelligence report on the strategic analysis of European pumps for commercial building services.