The electric vehicle (EV) charging and heat pump product sectors are to grow following the electrical wholesale market contracting in 2020.
With the electrical wholesale market heavily linked with the construction industry given its significant demand profile, the market's performance was lowered in 2020 as a result of the disruption to construction output caused by COVID-19, according to AMA Research. Indeed, as trading began to return to normal in late 2020, supply shortages were experienced in many product areas, leading to price rises.
However, the electrical wholesale market is now forecast to return to modest growth in 2021, with the product sector markets for EV charging points and renewable energy products set to grow, as are those associated with heat pumps, home automation and building management systems.
The electrical products market is set to remain highly competitive, with increasing competition from non-specialist and online retail channels. Margins are also expected to remain tight in most product areas, with wholesalers to seek to increase profitability through the growth of high-value or niche product markets or development of added value services.
The number of electrical wholesalers establishing e-commerce operations is also set to increase, and will no longer be confined to larger national and regional chains. There will also be further growth in digitalisation of business processes.
Abdul Tantouch, market research analyst at AMA Research, said: "Though construction output growth will drive advance in the electrical wholesale market, market value is constrained by intense price competition, especially from online channels, with wholesalers focusing on high value product areas, such as home and industrial automation, as well as value added services, to maintain and improve profitability.”