The overall electrical wholesalers
market in leading EU countries was estimated at €34bn in 2016, having seen a
moderate increase on 2015, with 2017 growth expected at around 2%. This is
according to AMA Research’s definition, which includes 12 EU countries, and
excludes the UK market. The European electrical wholesale market has been
affected by the downturn in construction in many countries over the last decade
but has begun to show signs of improvement in 2016 and early 2017.
Germany represents the largest
market for electrical wholesalers by value, followed by France and Italy, both
some way behind. It should be said that there can be substantial variations in
estimates of market size and mix by country due to there being a variation in
definitions of what constitutes an electrical wholesaler, with some
organisations providing much wider range of products than others – in some
cases non-electrical ranges - which account for a significant proportion of
turnover.
Prospects in the medium term will
continue to be variable as some countries continue to impose tough public
spending cuts to reduce their budget deficits, while in other countries the
economic situation has improved over the past 1-2 years. Broadly, forecasts
over the next few years in the electrical wholesaling market indicate modest
recovery, reflecting a combination of increases in new housebuilding levels and
a steady recovery in consumer spending feeding through into rising demand for
electrical products in the medium term.
New market opportunities are also
emerging with the electrical sector adopting variable levels of involvement in
renewable energy and home automation, while IT and communications also continue
to attract significant investment. Conversely, external threats to the sector
have grown with a switch to offsite manufacturing in some countries and a
growing focus on modularity in areas such as wiring and circuit breakers.
“In
all of the markets reviewed, the ‘national’ players dominate the electrical
wholesale market by value in 2016 – typically with shares of over 65% for the
top 2-3 players” said Keith Taylor, Director of AMA Research. “It is becoming increasingly difficult for
the smaller, independent companies to compete in the market for reasons
including an inability to match depth and range of stock of the larger
operations, the higher investment in IT and health & safety required, the burden
of product regulations and other legislation, together with expectations to
provide training and additional services”.
The continuing rationalisation has
remained a key feature of this market, with further acquisitions consolidating
the dominant positions of Rexel and Sonepar. Both organisations have
continued to expand their operations in less mature markets in developing
economies. Other groups with wholesaling operations beyond their national base
are Solar and CEF, but neither group has the international scale of operations of
the leading two suppliers. The trend towards further concentration of supply
has also included buying groups, which are strong in the electrical wholesaler
market. In addition, some vertical integration of the supply chain has taken
place.
The outlook is for steady, if modest,
growth to 2021, which will be underpinned by returning confidence in the
European construction sector but characterised by severe price competition,
particularly from imported products from the Far East.
The ‘Electrical
Wholesalers Market Report - Europe 2017-2021 Analysis’ report is published
by AMA Research, a leading provider of market research and consultancy services
within the construction and home improvement markets. The full report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242
235724. In addition, also on offer are reviews of the 12 individual countries
and a separate review of the UK electrical wholesale market is also available
on our website.
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