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Electrical Wholesale prospects

According to AMA Research, the electrical wholesale market contracted by 16% in 2020 due to the disruption to construction output caused by the Covid-19 pandemic. However, forecasts are looking positive as the market is expected to return to modest growth in 2021.

The performance of the electrical wholesalers’ market is intrinsically linked to the performance of the construction sector, with the majority of its products required in new build and RMI activities. Covid-19 led to a significant curtailment of construction activity and electrical wholesalers’ business operation. As trading gradually returned to more normal conditions in the latter part of 2020, supply shortages were experienced in many key product areas, leading to price rises.

It is expected that the number of electrical wholesalers establishing e-commerce operations will increase and will no longer be confined mainly to larger national and regional chains. However, trade counters will continue to be the main focus of business for most smaller regional and local wholesalers for the near future at least.

AMA Research believes there will be increasing focus on higher value, specialised products, for example through products aimed at the industrial automation sector. Other growing product sectors markets are likely to include home automation and building management systems, electric vehicle charging products and renewable energy products, such as those associated with heat pumps.

Abdul Tantouch, Market Research Analyst at AMA Research commented: “Following the substantial downturn caused by the Covid-19 pandemic, only modest improvement is forecast for 2021, before economic recovery drives more robust growth from 2022. 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.”

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