This Key Note Market Report analyses the UK electrical wholesale market, which was worth an estimated £2.9bn in 2003, an increase of just 1% on 2002. The market covers products that are primarily used in the construction industry and, to a lesser extent, the industrial sector. Although the value of construction output has risen during the past few years, the important housebuilding programme (number of new houses started) has been stagnant.
Major product categories sold by electrical wholesalers are cables, wire, consumer units, fusegear, circuit breakers, wiring accessories and lamps/light fittings. Electrical wholesalers play an important role in holding stock and credit facilities for customers. Of great importance to this market is the electrical contracting sector, which supports thousands of small companies.
The market has experienced extensive consolidation and is now dominated by a handful of companies, including large international groups. In addition, there has been a small reduction in the number of branches since the beginning of the decade.
Among the factors currently having a major impact on the market are intense price competition, increasing legislation, counterfeit products and a government-led approach to sustainable construction. A number of legislative and regulatory changes are in progress that will affect the electrical contracting sector and, ultimately, electrical wholesalers, which will be consulted for advice on these matters.
Proposals for Building Regulations are being discussed that will require building control offices to be notified of major works not undertaken or approved by competent persons. Another aspect of new Building Regulations requires the use of a specified number of energy-efficient lamps in new buildings. The recycling of electrical and electronic materials is also coming into force. These are all areas on which electrical wholesalers could be expected to give advice.
Counterfeit products, most of which originate from China, continue to enter world markets and the UK electrical industry is taking action to stop this activity at source.
Future growth for electrical wholesalers depends on some real increase in the UK construction market. It is generally recognised that a huge increase in housebuilding is needed to satisfy the present demand and reduce prices. Government action is improving the public housing sector (including maintenance), but the high value of houses and the possibility of further increases in interest rates are currently restraining growth in the private sector. Planning regulations are also holding back further development in the construction industry at present, but the Planning Act should eventually ease matters in this direction. The electrical wholesale market now has training programmes in place to improve employee recruitment and retention.
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