New report finds optimism for the UK lighting market in 2016

The report forecasts real term growth for the UK lighting market over the next few years. (MTW Research)

A new report on the UK lighting market from market research firm MTW Research forecasts healthy growth in 2016 as sales of LED lighting continue to invigorate the market – despite some threats. By James Hunt:

Real term growth is predicted for the UK lighting market over the next few years, with key opportunities being available for lighting suppliers to grow sales in both the domestic and non-domestic sectors. So says MTW, which also predicts a 4% growth for 2016.

Essentially, the company finds, sales in the UK lighting market should show above inflation growth to 2020, with LED lighting providing significant impetus, as would be expected.

This new study, by MTW Research and based upon data from 200 lighting suppliers, examines the UK lighting market and provides a comprehensive review of it in both domestic and non-domestic sectors in 2016. Designed for use in business plans, enhancing marketing plans, developing competitor analysis, identifying key growth sectors and for growing sales quickly, the report is based upon financial data from more than 200 lighting market suppliers having – collectively – sales of over £5 billion.

This report looks at LED lighting, commercial lamps and luminaires, and domestic lamps and luminaires – whether this includes controlgear or not (as it should) is not known. Certainly, looking at a partially redacted free sample of the study, no specific mention is made of controlgear, though where LED light sources are concerned, modules and light engines are covered.

New technologies

The study identifies the technologies likely to provide growth (including of course LED), as well as new market directions in 2016 and beyond. One of these is Li Fi (Light Fidelity), which is a bidirectional, high speed and fully networked wireless communication technology similar to Wi-Fi.

It is a form of light communication and a subset of optical wireless communications (OWC) and could be a complement to RF communication (Wi-Fi or Cellular network).

To date, the data speeds are about 100 times faster than some Wi-Fi implementations, reaching 224 gigabits/s. Li Fi uses either visible light communication, or infra-red and near ultraviolet spectrum. It is a technology that Voltimum UK will be covering in the near future.

Another growth area identified is energy retrofits, which are also set to offer significant growth for lighting suppliers in 2016. Another is the enhanced efficacy of LED lighting (resulting in significant energy savings), which will continue to boost lighting refurbishment. However, the report finds, new builds will also underpin demand growth to 2020.

Positive but with threats

Overall, this report makes a positive forecast for most key sectors within the UK lighting market. It also emphasises diode technology developments, as well as the increasing consumer confidence surrounding LEDs, meaning this technology continues to outperform the overall market.

These findings are despite the fact that large numbers of below par LEDs are finding their way to UK shores, and that the major LED manufacturers – Philips, OSRAM etc – are finding it hard to complete with cheap commodity LEDs – and are looking to add value instead by going to other markets and integrating with new technologies, such as the Internet of Things (IoT).

Indeed, MTW reflects this to some extent by saying that there are threats to growth, and one of these is the over saturation 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 – but this could promote rising pricing pressure.

Commenting, 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.”

The full study, entitled ‘The Lighting Market 2016 Report’, which also provides a share by distribution channel and includes an optional retailer mailing list and three-year financial spreadsheets for 200 lighting suppliers, is available to purchase from £595 at www.marketresearchreports.co.uk