Abstract
The UK Non-Domestic Lighting Equipment Market is defined to include three key
product sectors: Lamps, Luminaires and Lighting Controls. Overall market value
is estimated at £920m in 2004.
The development of the overall non-domestic lighting market is significantly
influenced by trends in industrial and commercial construction and has
therefore exhibited slow to moderate levels of growth over the last few years.
The retail, entertainment and warehousing sectors have benefited from the
consumer spending boom, while the industrial and commercial office sectors
have been adversely affected by the recession in manufacturing and an
oversupply of office space in London and the South East. While the market has
also benefited from government investment in health and education, it has been
adversely affected by a growing level of imports from low wage economies such
as China and the Far East.
Also impacting upon the market over the last few years has been a growing
level of legislation aimed at reducing carbon dioxide emissions. While Part L
of the Building Regulations, introduced in 2002, has encouraged modern
buildings to maximise utilisation of natural daylight, the requirement for
greater energy efficiency has resulted in increased usage of added-value
energy saving products and lighting controls.
The downturn in consumer spending since mid 2004 and its negative impact on
the retail and entertainment sectors, combined with continued difficulties in
the manufacturing sector, is likely to feed through to a market slowdown in
2005. Subsequently the outlook is likely to be one of modest growth, with a
steady improvement in the commercial office sector, a significant number of
projects in the health and education sectors and infrastructure developments
including airport extensions, 'Crossrail', the cross London rail link, and a
number of major PFI street lighting schemes. In the medium to longer term, the
market will also receive a boost from developments in connection with the 2012
Olympics.
Luminaires account for the largest share of the non-domestic lighting market
at approximately 61%. Lamps have a share of around 28%, with lighting controls
accounting for the remaining 11%.
The lamps sector is valued at around £258m in 2004 and has exhibited more
steady levels of growth than other sectors of the non-domestic lighting
market, being less dependant upon economic factors due to the significant
ongoing demand for replacements. Discharge lamps represent the largest
subsector with 32% of the lamps market, followed by Tungsten Halogen with 29%,
Compact Fluorescents (15%), Fluorescent Tubes (12%) and Incandescent (4%).
Fibre Optics and LED's are currently experiencing rapid growth, however at
present their share of the market is small, accounting for some 4% each.
There are a wide variety of luminaires used in non-domestic applications, with
this sector valued at some £560m in 2004. Growth in this sector is more
volatile than in the lamps sector, reflecting its dependence upon commercial
and industrial new build and RMI. Luminaire sales have also been adversely
affected in recent years by the highly cost-competitive nature of the
electrical contracting market, driving the specification of cheaper 'own
brand' and imported ranges. However, the increasing emphasis on appearance in
the commercial sector has encouraged the use of more expensive design oriented
ranges.
The lighting controls and components sector has experienced good levels of
growth in recent years to a value of around £102m in 2004. The sector has
benefited in particular from increasing legislation relating to energy
efficiency and the impact of rising fuel bills. The majority of commercial
office installations now incorporate lighting control systems, however there
remains considerable potential for further growth reflecting the continuing
drive to reduce carbon dioxide emissions and the relatively low penetration of
installations in some other sectors such as retail.
The distribution of non-domestic lighting equipment is dominated by
wholesalers and distributors who account for around 62% by value, with this
channel comprising general electrical wholesalers/distributors and specialists
who supply primarily lighting equipment. Direct supply accounts for an
estimated 29%, with other channels of distribution - including DIY multiples
and builders merchants - accounting for approximately 9%.
The non-domestic lighting market is characterised by two polarised groups of
suppliers, with a small number of large manufacturers, most of whom are active
across a wide range of products sectors and a large number of small players,
the majority of whom are active in just one or two niche subsectors. Major
players include Zumtobel Group Companies, Phillips, Osram, SLI, GE Lighting,
Cooper Lighting Security Ltd and Fitzgerald.
Key end use application areas for non domestic lighting equipment include
commercial offices (21%), entertainment & leisure (17%), healthcare (17%),
education (14%), retail (13%), industrial (9%) and infrastructure (5%), with
'other' applications such as prisons and the MOD accounting for 4%. Sectors
likely to offer the greatest potential for growth over the next few years
include healthcare, education, infrastructure and commercial offices.
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