The total market for electrical accessories and equipment used in domestic applications is estimated at around £1 billion.

The market excludes appliances and home entertainment systems, but includes both DIY and professionally installed equipment. DIY accounts for a high share of lighting, plugs and security alarms, but a much lower share of wiring accessories, circuit protection, extractor fans, showers etc.

The new housing market has been relatively static in terms of output in recent years, with annual volumes around 170,000-190,000 units. Housemoving levels have recovered from the slump of the early-1990s and are typically around 1.5 million households annually, but still well below the peak volumes of over 2 million in the late-1980s. Both the new housing and housemoving sectors represent major markets for electrical accessories, but general RMI activity is by far the largest sector.

Demand for electrical accessories and equipment continues to enjoy strong growth as a result of the need for more power points, growth in security, showers, extractor fans, spot and external security lighting etc, all typically requiring professional installation.

The electrical contractors market remains highly fragmented with over 20,000 companies in the UK. Less than 1 percent of these operate with sales turnover of £5m+, while 60 percent have annual sales of less than £100,000.

The focal point of the report was a review of buying and specification processes used by electrical contractors for accessories and equipment, based on a survey of over 120 contractors. Brand specification issues were reviewed, with 53 percent of contractors indicating that Local Authorities would specify requirements by a single brand, while Housing Associations were generally more flexible. Only 12 percent of contractors indicated homeowners were actively involved in brand specification and this often related to specific products only, such as showers.

In terms of key purchasing criteria for accessories, price was placed first, or equal first, by 62 percent of respondents, but delivery performance, availability and quality were also critical factors. Most respondents were aware of the availability of low-cost imports from the Far-East, with comments often very emotive relating to their quality and value.

Over 50 percent of the sample used at least 5 different wholesalers for suppliers, with only 3 percent indicating they were single-sourcing. National wholesale chains were used exclusively by 50 percent of respondents, or in conjunction with local wholesalers or direct from manufacturer for the majority of the other 50 percent.

Catalogues were a primary source of ordering details, while manufacturers or wholesalers catalogues were regarded as the major source of product information by almost 70 percent of the survey. Trade reps, magazines, direct mail, exhibitions etc, were also key information sources for many contractors.

In terms of costs of accessories, only 14 percent of respondents indicated prices had risen in the last 12 months, with the vast majority of contractors commenting on the competitive nature of the market. Around 30 percent of contractors had managed to increase their own installation charges over the same period, with 55 percent indicating prices were relatively stable. Around 25 percent of respondents anticipated increasing their charges in the next 12 months, though 42 percent indicated they did not know whether they would be able to increase prices given the uncertain economic climate in early 1999.

Some 48 percent of respondents indicated an upturn in business activity in the last 12 months, but were more cautious of their prospects for 1999, though only 11 percent actually anticipated a decline in activity levels in the coming year.