Europe Electrical Components Market

The Europe Electrical Components market size is analyzed to grow at a CAGR of 2.6% during the forecast 2022-2027 to reach $361.2 billion by 2027. Electrical components of diversified ranges are imperative to several industries as they are responsible for controlling currents or voltages, and several other long-running advantages. The growth of the Electrical Components Industry is influenced by a number of prominent factors, such as rising penetration of industrial IoT for digital twins, advancements in semiconductor technology and popularity of the Stretchable Electronic applications. Electrical components such as resistors, capacitors, transistors, inductors, light emitting diodes and circuit breakers are an indispensable part of every business sector, including industrial manufacturing, automotive, healthcare, aviation and many more. In addition, the avant-garde opportunities offered by the next generation electronic devices, such as smartphones, laptops, wearable electronics and bioelectrical devices continue to promote the growth of the market. Therefore, the surge of new age of technologies, pertinent to autonomous vehicles, bioelectrical devices, AI-powered computer assistants, and other array of innovations propelled the growth of the Europe Electrical Components. In the recent years, As stated by International Energy Agency (IEA), many policies were taken by German government came into operation for the development of electrical sector. Growth in the construction industry will further enhance the Electrical components market growth by application of different automation solutions such as cables, wires, safety tools and others. The construction of the Fehmarn belt underwater tunnel between Germany and Denmark, which is worth $7.8 billion with a growth supported by the 10-year plan to invest $94.7 billion on the construction between 2022 and 2030. These type of developments and Government initiatives tend to uplift the market growth of Industrial automation solutions which further enhance the Electrical components Market in the forecast period.

Key Takeaways

• Heating, ventilation, and air conditioning (HVAC) technology is expected to emerge with high growing owing to the growing adoption of smart homes and related technologies.
• The strong penetration of smartphone and other kinds of smart devices along with the prevalent demand of bandwidth connectivity are some of the factors that resulting to the positive impact on the market growth.
• Due to Russia-Ukraine war, there has been hikes in electric components prices as Russia is one of the major suppliers of these solutions.
• Growth in the construction industry will further enhance the Electrical components market growth by application of different automation solutions such as cables, wires, safety tools and others. The sharp growth in 2022 will mainly be driven by the very low starting base in the previous year, particularly in the second quarter.
• Energy distribution solutions such as capacitors, resistors and circuit breakers are set to witness significant growth during the forecast period.

Europe Electrical Components Segment Analysis - By Building Automation

By building automation, the Europe Electrical Components industry is segmented into Building Automation, datacom accessories, security and Wiring accessories. Among them, security segment is analyzed to hold the maximum share of 35.4% in 2022. The dominance of the segment is witnessed owing to government initiatives to promote the smart sensors owing to the rising concern of safety along with the growing adoption of smart home technologies. Under the National Projects 2019-2022, the Russian government plans to spend $88.2 billion on the development of transport, healthcare, education and housing infrastructure during the period of 2019-2022. These investments will further uplift the Electrical components market growth. Recent trends such as investments in the transport, renewable energy, telecommunication, and manufacturing sectors by Russian government is expected to uplift the Electrical components market growth. The government had outlined plans in 2019 to spend $96 billion on the development of the country’s transport infrastructure over the next five years.

Europe Electrical Components Segment Analysis - By Lighting

By lighting, the Europe Electrical Components is segmented into Fixtures and lamps & Light Emitting Diodes. Out of these solutions, lamps & Light Emitting Diodes is analyzed to hold the maximum share of 57% in 2022 of the Europe electrical components market size. The growth of segment is attributed owing to the escalating adoption of LED lighting in both the urban and semi-urban provinces of the country. In 2022, due to Russia-Ukraine war, there has been tremendous decrease in Russian market including electric components. It has also negatively impacted electric vehicles business in Russia due to which there is hike in prices which has led to reducing in electrical components market. Russia-Ukraine war has also speculated on the supply-chain impact of a potential conflict mainly as those supply chains are still recovering from 24 months of coronavirus, labor and raw materials issues. This is poised to increase the market growth in slow pace. International Energy Agency (IEA) proposed for streamlining of the electricity markets regulatory framework by removing barriers to efficient wholesale and retail market pricing which is expected to give positive outcomes further providing advantage of innovation and competition while boosting decarbonization through cost-effective measures. These policies will ensure a cost-effective production of electrical components among market players which tend to uplift the demand of various upgraded Electric components further enhancing its market growth.

Europe Electrical Components Segment Analysis - By Geography

Germany region is analyzed to be the major region with a share of 16.5% in 2022 for the Europe Electrical Components, owing to the promising penetration of smartphones, prominence of electronics manufacturing sectors, expansion of the IT and telecom sectors and government support for initiating IoT and LTE integration. With the continues investments in various sectors such as Building & Construction, Industrial, Manufacturing and Others, the demand for Electrical components has shown a positive growth in the European market. Germany is analyzed to hold the largest market size in European Electrical components Market in forecast period because of its rising investments in the industrial sector, construction sector and manufacturing sector in recent years. According to World Bank Reports, value added in the industry sector including construction was recorded at $1.1 trillion in 2022 accounting for about 26.7% of its GDP. Germany is one of the top power producers and a buyer of Russian gas. Due to Russia-Ukraine war, the Germany market growth has been reduced due to which, stopping energy imports from Russia and this has highly impacted the Germany market including electrical components, as Russia is one of the suppliers of raw materials. Electrical components play a very important role in maintaining a highly efficient Industrial Automation facility. Rising Smart City initiatives in Germany tend to enhance the Electrical components market growth. With the increasing investments and governmental initiatives such as Industry 4.0. It is expected to uplift the Electrical components Market in the forecast period. According to Global Manufacturing & Industrialization Summit (GMIS) 2022, Germany took an initiative which lay prime interest in the upliftment of Manufacturing sector by implementing Germany 4.0 vision which is expected to make Germany as one of the world’s most dynamic and advances economies.

Europe Electrical Components Drivers

Rise of Renewable Energy Solution

The eminence of renewable energy solutions, owing to the advancement of electrical components in reference to Heating, ventilation, and air conditioning (HVAC) technology is resulting in the growth of the Europe Electrical Components. In April 2022, Durastar, a Ferguson heating and cooling brand launched its line of mini-split systems on the Power Equipment Direct family of stores. The latest product offers robust performance and 10-year parts warranty, installed by a licensed HVAC contractor. Furthermore, the increasing government’s focus on denoting renewable energy infrastructure, specifically in Northern and Central Europe accelerate the growth of the market. The Netherlands has set targets for greenhouse gas emissions emission to be reduced by 95% versus 1990 and for 100% of electricity to come from renewable energy by 2030. It has developed a detailed offshore wind roadmap, easing permitting procedure and aiming for 11.5 GW of total installed capacity by 2030. The long-term impact of 100% renewable electricity generation by 2040 on the generation adequacy, system resilience and cost-effectiveness of electricity supply will further boost the market growth of Electrical components in forecast period in the Swedish market. Therefore, the considerable governments funding to promote advancement in the renewable energy sector, along with the emergences of augmented reality technologies are observed to provide lucrative opportunities for the Europe Electrical Components industry.

Large-scale adoption of Industrial Automation Solution

The Industrial Automation solution has been witnessing rapid advancement in recent years, which eventually highlighted the emergence of latest wireless devices and other industrial communication solutions, thereby driving the growth of the Europe Electrical Components. In October 2022, the global supplier of IoT intelligent systems, Industry 4.0, and machine automation solution, Advantech expanded its line of device servers and Modbus gateways with the launch of the EKI-1521I-SC-A, EKI-1221I-MT-A, and EKI-1222I-SC-A. These Advantech solutions are fiber optics ports for providing enhanced connectivity in services, including long distance transmission as well as protocol conversion which drives the need for circuit breakers and capacitors. Innovation in the Denmark’s manufacturing sector such as the inclusion of digitalization, additive manufacturing and so on has led to enhance the need for industrial automation which is leading to the increasing demand for electrical components. Furthermore, according to Eurostat, Slovakia’s manufacturing industry’s value grew by 19% in the first half of 2022 which tend to create major impact in the growth of Electrical components market during the forecast period. Therefore, the expansion of industrial IoT for digital twins and augmented reality technology are some of the factors that are analyzed to drive the growth of the Europe Electrical Components market size.

Europe Electrical Components Challenges

Economic Impact by Covid-19 pandemic

The outbreak of Covid-19 pandemic represents as the twin challenges to lives and livelihoods. The implication of the pandemic to business is very disruptive, and most of the industry verticals, such as manufacturing, construction, power and other sector are witnessing economic complexities. Hence, these unexpected pandemic consequences brought severe repercussions to various electrical components, and impede the growth of Europe Electrical Components market size. While the construction industry began to show signs of improvement after the COVID-19 pandemic outbreak in early 2022. According to International Trade administration (ITA), turnover in this sector was $580 million in 2022, compared to $714 million in 2019 accounting for capital investments together with funds from the Public Enterprise for State Roads in Macedonia alone showcasing the vast effect of the pandemic.

Europe Electrical Components Industry Outlook

Partnerships and acquisitions along with product launches are the key strategies adopted by the players leading the Europe Electrical Components market share. The Europe Electrical Components top 10 companies include

• ABB Ltd
• Sumitomo Electric Industries Ltd
• Honeywell
• Broadcom, Inc.
• Emerson Electric Co
• Toshiba Corporation
• OMRON
• Schneider Electric
• Eaton
• General Electric

Recent Developments

• In October 2022, Emerson Electric Co, the global leader of electronic & other electrical equipment announced the completion of the acquisition with Progea Group, an industry-leading provider of industrial internet of things (IIoT), plant analytics, human machine interface (HMI) and supervisory control and data acquisition (SCADA) technologies. The acquisition is formed to bridge a critical customer technology gap, and optimize successful digital transformation.
• In September 2022, the private investment arm of Select Equity Group, L.P. (“SEG”), Astor Place Holdings acquired a majority interest in Douglas Electrical Components, pioneered in custom-made, proprietary hermetic components and other interconnect solutions. The acquisition offers an excellent organic growth record to Douglas Electrical Components in developing comprehensive electrical connectors, hermetic wires and so on.
• In January 2022, FDH, a portfolio company of Audax Private Equity (“Audax”) acquired BTC Electronic Components (“BTC”), a Wake Forest, NC based specialty distributor of high-performance connectors and accessories, which majorly focused on aerospace, military and industrial end markets. The strategic acquisition strengthens the product portfolio of FDH with electronic connectors of BTC.

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