While 2015-16 is likely to be a difficult period for most Western European electrical wholesale markets, medium-term prospects are relatively optimistic, according to a new report.
AMA Research says the overall electrical wholesale market within the EU (excluding recent accession countries) is worth around £26bn, with the market value having remained at a similar level since 2012 - though there have been significant changes within individual markets.

Some of the largest electrical wholesale markets in Europe have performed reasonably well over the last five to six years. Germany is the largest, accounting for over 30% of sales in Western Europe, reflecting high specification standards and a strong manufacturing base requiring electrical components.

A key trend, says AMA, is the ongoing rationalisation of wholesaling, with further acquisitions consolidating the dominant positions of Rexel and Sonepar across the major markets.

It is becoming ever more difficult for the smaller, independent companies to compete in the market, with a high dependence on buying groups and few new entrants to the sector.

Positive influences include growing investment in IT and growth of renewable energy initiatives. In particular, the increase in online activity is changing the electrical products distribution sector, as companies develop more of a multi-channel approach to targeting customers.

However, the report says that in comparison to other sectors e-commerce is underdeveloped in this market, though changing as electrical contractors overcome their traditional approach to product selection and ordering processes.

A combination of increases in housebuilding and a steady recovery in consumer spending are predicted to feed through into rising demand for electrical products in the medium term.

New market opportunities are also emerging, but threats to the sector have grown too, with a switch to offsite manufacturing in some countries and a growing focus on modularity in areas such as wiring and circuit breakers, which may impact on the role of wholesalers in some countries.