Electrical Accessories market grew in 2011

Electrical Accessories market grew in 2011

The value of the electrical accessories market grew in 2011 due to increases in raw material costs pushing up prices and modest improvements in construction levels in domestic and non-domestic markets.

The value of the electrical accessories market fell in 2008 and 2009 from a peak of £1.6bn in 2007, due to difficult trading conditions and the economic downturn, resulting in a decline of 20% over two years.

Though the difficult economic situation continued into 2010, there was a substantial rise in raw material prices, in particular copper, and this inflated prices offsetting low demand and leading to a marginal increase in value terms.

In 2011, the market returned to growth as prices continued to support the market and construction output improved and the market was supported by major public sector projects already committed or started prior to cuts.

2012 is estimated to see marginal decline as public sector cuts begin to impact on construction levels significantly and as caution remains in the private sector.

Three sectors
The market is split into 3 distinct product groups – Wiring Accessories, Circuit Protection and Low Voltage Cable Systems and includes a number of products used for low voltage electrical installations with power ratings of up to and including 1kV AC or 1.5 kV DC. The market is dominated by low voltage cable systems with value share of 59%, followed by circuit protection with 25% and wiring accessories with 16%. As the electrical accessories market is mature, the product mix has remained fairly stable in recent years.

Raw material prices play an important role in market performance for electrical accessories, with the price of cable in particular being highly dependent on copper prices. These have fluctuated widely in recent years – there was a substantial fall in 2008/09 with prices falling by around 65%. Since then copper prices tripled and reached a new peak before stabilising.

There has been downward pressure on product prices as manufacturers compete in markets suffering from reduced demand, though product development, higher raw material prices and a weakened currency has led to prices increasing over the past two years, supporting the market. Activity at supplier level during the recession has been focused on consolidation, rationalisation and cost cutting exercises, with many taking the opportunity to integrate earlier acquisitions, streamlining purchasing processes and even repositioning their businesses.

The electrical accessories market being a mature and sizeable market, recovery will be slow with the market value not expected to return to its 2007 peak level even by the end of the forecast period. Current forecasts indicate annual increases of 4-5% from 2014 onwards as the economy improves and house building activity increases, and it is expected that the market value will be around £1.6bn in 2016. However, this will depend on the speed of economic recovery and any fluctuations in raw material prices.

AMA Research’s report “Electrical Accessories Market Report - UK 2012 – 2016 Analysis” is available in hard copy or electronic format. It can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.