AMA Research looks at the reasons behind the growth in the electrical accessories market in recent times and offers a glimpse into what the future might hold.
In 2015, the UK’s electrical accessories market is estimated to have grown by 6%, driven primarily by improvements in construction output. The growth rate in 2016 (which has yet to be published) is forecast at a more modest 3%.
Although the improving economic situation has led to a rise in construction output across most end use sectors, price competition in lower cost products and increasing levels of low cost imports impacted negatively on market value in 2013 and 2014, with just 1% growth achieved in each of those years.
The market is dominated by low voltage cable systems with value share of around 60%, followed by circuit protection accounting for around a quarter of the market, and wiring accessories with a smaller share in value terms. As the electrical accessories market is mature, the product mix has remained fairly stable in recent years.
Key influencing factors on the market include legislation on energy efficiency and carbon emissions, which has seen increased use of integrated systems spreading throughout domestic and commercial markets to provide greater control for heating, lighting and all electrical systems.
Raw material prices also play an important role in the market performance for electrical accessories, with the price of cable in particular being highly dependent on copper prices. In addition, exchange rates can influence the market value substantially as many products are imported.
Supply within the electrical accessories market is generally dominated by a number of large multi national organisations, who may offer a wide range of products, of which electrical accessories form a part. The market also contains a number of smaller, electrical accessory focused companies specialising in a specific area of the market. Recent activity at supplier level has involved consolidation, rationalisation and cost reduction, along with research and development to exploit opportunities for value added products.
The electrical accessories market is a mature and sizeable one, therefore forecasts are for relatively slow and steady growth of 1-3% per annum until 2020, in line with relatively subdued forecasts for construction as a whole, following the UK’s decision to leave the EU.
The current focus on integrated solutions and systems within the electrical accessories market will continue to feed demand in the medium term, as well as an increased use of pre-fabricated and modular wiring assemblies that make installations easier and quicker. Energy efficiency regulations will also continue to influence the development of the market.
“In addition to the current uncertain state of the economy, pressure on pricing is likely to remain a feature of this market for some time” said Keith Taylor, Director of AMA Research.
“However, the weakness of Sterling has recently driven up the price of imported products and this has boosted the export market and may lead to higher demand for UK-manufactured products. Raw material costs will therefore continue to be a major influence on market value.”
The ‘Electrical Accessories Market Report – UK 2016-2020 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets.