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.
The market was estimated to be valued at around £1.3bn in 2010, a
decline of 17% since its peak in 2007.
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. It is estimated that in 2011 the market
will return to growth. There are only a few anecdotal signs of the
economy recovering at the time of writing, but housebuilding is
expected to pick up during the year and the market will also be
supported by major projects already committed or started in both
the public and private 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 58%,
followed by circuit protection with 26% 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 have tripled and
are now at their highest point ever.
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 modest annual increases of 2-3% from 2012
onwards as the economy improves and house building activity
increases, and it is expected that the market value will be around
£1.5bn in 2015. However, this will depend on the speed of economic
recovery and any fluctuations in raw material prices.
