Cleveland, OH — U.S. demand for electric transmission and distribution equipment is expected to increase 3.6% annually, approaching $21 billion in 2011. Increases will be supported by a healthy industrial environment coming out of the early 2000s economic downturn, and growth in non-utility power generation. In addition, the maturation of deregulation efforts and regulatory changes designed to ensure returns on investment in the electric grid will support demand from electric utilities.
These and other trends are presented in Electric Transmission & Distribution Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
By their very nature, the largest and most traditional markets for electric transmission and distribution equipment are the electric utilities and industrial sectors. In 2006, electric utilities accounted for nearly 45% of total demand, with the industrial sector — including non-utility generators — accounting for an additional 35%. Growth in these markets will be supported by increasing electricity generation by independent power producers and cogenerators, combined with an improved outlook for capital spending by utilities and regulatory changes designed to ensure returns on investment in the electric grid.
The smaller government and institutional market will see the fastest increases through 2011, with gains supported by growth in transportation construction spending and government fixed investment. Both the commercial and residential markets will see below average increases, with particularly weak prospects in the residential market due to the slowdown in residential construction. Still, the continuing penetration of consumer electronics and electric transmission and distribution product innovations will provide opportunities in residential applications.
The best opportunities will be in specialty transformers and metal-clad and metal-enclosed switchgear. Demand for specialty transformers will increase 5.9% annually through 2011, benefiting from the improved outlook for machinery markets and industrial construction, as well as solid increases in non-residential fixed investment.
Metal-clad and metal-enclosed switchgear demand will rise 5.7% per year through 2011, driven by an improved outlook for electric utility capital expenditures, a strong replacement market and technological innovations. Power circuit breakers and electric meters will also see solid increases.
Electric Transmission & Distribution Equipment (published 07/2007, 300 pages) is available for US$4,400 from The Freedonia Group Inc. For further details, visit www.freedoniagroup.com.