Executive Summary

The principal sectors of demand for lamps and lighting equipment are derived from domestic, commercial and industrial activities, and to a lesser extent from institutional, public amenity, agricultural and transport activities within the total economy. Apparent UK demand, which is based on UK manufacturers' sales plus imports less exports, is valued at an estimated £1.98bn in 2000, compared with £1.62bn in 1996. Exports are estimated to have declined marginally during this period, from £460m to £450m, whereas imports have grown substantially, from £567m to an estimated £785m.

As mains electricity supply is available practically everywhere in the UK, the electric lighting industry has grown and attracted a wide range of suppliers including component manufacturers and assemblers, importers, wholesalers and retailers, which serve the diverse markets with a variety of lamps, lighting fixtures and fittings. A few big companies are the dominant suppliers in all the major markets, but, because of the range of customers with different requirements, there is scope for many small companies to exist within the industry. Consequently, the industry is highly fragmented and competition for business among all the suppliers, from manufacturers to retailers, is intense.

Growth in total demand for lighting products is relatively slow at present, as the industry is heavily dependent on economic growth to stimulate demand for new buildings and the refurbishment of existing buildings, e.g. offices, hotels, stores, shops, restaurants, entertainment centres, etc. Consumable products such as lamps do need occasional replacement, but fixtures and fittings last almost indefinitely and so are rarely changed unless they become evidently inadequate for their purpose or are perhaps unfashionable. However, there are some areas where demand is growing rapidly, such as the flood lighting of houses and of commercial and industrial properties as a deterrent to thieves and vandals. Also, there is increasing expenditure on the subtle floodlighting of monuments, buildings and places of historical interest by private and local authorities which want to attract tourists to their area.

Over the next 5 years, total demand is expected to increase from £2.07bn in 2001 to £2.40bn in 2005, so total growth in real value terms will be around 16%. Exports are expected to be almost static, growing only from £427m to £429m over the period. Even if the euro/sterling exchange rate problems are resolved during this period, it seems unlikely that there will be a surge in exports to continental Europe.

It is anticipated that imports will rise from £808m in 2001 to £925m in 2005, so total growth in imports will be around 14% to 15%. Investment by the multinationals in production plants in eastern Europe and the Far East is increasing, so much of their output will eventually be sold in the UK and other countries in western Europe.

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