Lighting market optimism for 2016
A new report on the UK lighting market from MTW Research forecasts healthy growth in 2016 as sales of LED lighting continue to invigorate the market.
With real term growth predicted in the lighting market in the next few years, the report identifies a number of key opportunities for lighting suppliers to grow sales to both domestic and non-domestic sectors, with 4% growth forecast for 2016. Overall, sales in the UK lighting market are set to exhibit above inflation growth to 2020, with LED lighting providing significant impetus.
MTW identifies several technologies set to offer growth and new directions to the lighting market in 2016 and beyond. Li-Fi, for example, uses light to transfer data at very quick speeds, harnessing state of the art light sources to provide lightning quick connectivity. ‘Energy retrofits’ are also set to offer significant growth for lighting supplies in 2016 according to the report. Enhanced efficacy of LED lighting has continued to boost lighting refurbishment, with new build also set to underpin demand growth to 2020.
Based on data from 200 lighting suppliers, MTW’s report presents a positive forecast for the majority of key sectors within the UK lighting market. However, developments in diode technology and increasing consumer confidence surrounding LED’s continue to result in LED lighting outperforming the overall market.
In response to the research, MTW’s lead analyst, James Taylor said: “The growth of LEDs and prominence of Internet distribution define the future of the UK lighting market.
“Consumer confidence has risen significantly, underpinning sustainable growth and offering a promising future for lighting manufacturers and retailers willing to adapt to changing demands and distribution patterns within the market.”
However, whilst the report highlights numerous opportunities for manufacturers and retailers, MTW also highlights several key threats to the industry which have the potential to dampen growth in 2016 and beyond. One such threat is the oversaturation of the LED market, which has been observed in the US lighting industry in the last few years. Volume demand for LED lighting will increase as manufacturers seek to capitalise on its commercial success, however this could promote rising pricing pressure.
Nevertheless the over-riding tone of MTW’s report is one of positivity with tangible growth forecast for most end use sectors in both domestic and non-domestic applications. The report also provides a share by distribution channel and analyses the independent retail sector in detail since 2010 with forecasts to 2020. The research found that more than 65% of lighting retailers experienced revenue growth in the last 12 months, as well as more than 95% of retailers have a fair-excellent credit rating, highlighting the overall stability within the UK lighting industry.