The HVAC market is showing early signs of steadying after several turbulent years. Residential demand is expected to improve as existing home sales pick up with easing mortgage rates, making service and replacement the strongest drivers of 2026 activity. New construction, however, is still projected to remain slow, keeping contractors focused on maintenance, upgrades, and renovation work rather than large volumes of new installs.

On the commercial side, growth remains uneven. Public‑sector projects — including schools, municipal buildings, airports, and infrastructure — continue to offer the most reliable HVAC opportunities, while private commercial work stays selective. Data centers stand out as a major bright spot thanks to heavy cooling and controls requirements. Analysts expect modest overall growth next year, with contractors encouraged to stay financially cautious amid ongoing material costs, labor shortages, and tight lending conditions. Click here to read more.