Energy efficiency and retrofitting drives UK Lighting Market growth

The UK lighting market was estimated to be worth around £1.6 billion in 2013 with good growth prospects for 2014, according to a new report by AMA Research. Forecasts into the medium-term remain relatively optimistic with growth projected at 4-6% per annum until 2018, driven by increased demand for energy efficient lighting and growth of LEDs.

The issue of retro-fitting of more efficient lamp products has been crucial to value growth rates within the market in recent years, particularly where incandescent lamps have been replaced with higher value alternatives. The trend towards LED technologies has also driven up value growth, as has the introduction of a number of finance schemes that allow for lighting refurbishments and replacement to be paid for from future energy cost savings.

The UK lamps market has experienced significant change in recent years as European Directives have impacted on the supply and sales of certain lamp types. The phased removal of inefficient lamps from both the residential and non-residential sectors has continued to see the replacement of the traditional incandescent lamp in the domestic sector with compact fluorescents which in turn have been replaced by LEDs. In addition the trend for improving lighting quality, particularly the trend for “whiter” light in the private commercial sector has increased demand for higher value LED and fluorescent products.

Luminaires account for the largest share of the UK lighting market accounting for a share of around 61% in 2013. The sector is reliant on the levels of new build and refurbishment activity, particularly in the non-domestic sector, and was affected by the decline in output for the private commercial sector from 2009-12. The recent trend has been positive with moderate market growth in 2013 underpinned by investment in street lighting as well as the beginnings of recovery of private sector offices and retail.

Although the lamps and luminaires sectors have experienced more positive conditions 2013-14 than in previous years, it is the controls sector that is experiencing the most positive growth.  Again this is due to the focus placed on efficiency and cost savings with organisations recognising the need to reduce unnecessary lighting provision.

“The key driver for the whole lighting market is LED lighting which has gained significant share in the non-domestic sector in recent years.  This technology represents an innovative aspect for the lighting market and is likely to promote a period of innovation and expansion particularly in terms of more integrated products, control and lighting solutions” said Keith Taylor, Director of AMA Research. “The adoption of more efficient lighting products in the medium-term will boost value growth, however these products have increased life cycle expectations which may have more negative implications for the market into the longer-term”.

The current trend for retro-fitting LED lamps into existing luminaires is likely to be superseded by the development of integrated LED luminaires into the medium-term, though the large established base of existing luminaires will sustain the trend for some years to come. However, increased demand for LED technologies is likely to lead to an increase in average prices for some luminaires.

The controls market is currently in a particularly innovative stage where new products are introduced on a regular basis thereby underpinning good value growth. This innovation stage is likely to transform to more moderate developments into the medium-term, though the integration with LEDs has created a good platform for increased use and benefit of lighting controls. However, the longer term trend for lighting solutions – where control, luminaire and lamp are incorporated into a single unit may dampen demand for separate controllers in future years and make market segmentation by product far more difficult.

The ‘Lighting Market Report UK - 2014-2018 Analysis’ is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.