USA. LIGHTING MARKET, 2018-20 ESTIMATES, 2021-24 FORECASTS. USD MILLION, ANNUAL % CHANGES
In North America, the pandemic has caused reduced construction and renovation spending as well as a disruption in the supply chain for certain components, both of which negatively impacted lighting sales. During 2020, most companies experienced temporary facility shutdowns due to government-mandated closures. In addition, companies needed, and still need, to incur additional health and safety costs including expenditures for personal protection equipment and facility enhancements to maintain proper distancing guidelines issued by the Centers for Disease Control and Prevention.
FORECASTS REVISED UPWARDS
However, forecasts for the performance of the US economy in 2020 have been revised upwards compared to preliminary projections. In October 2020 the IMF expected a contraction of 4.3% for the US GDP in 2020 compared to 2019. The last available estimations assess a decline of 3.5% for the same period. The same is true for the trend of private consumption during the 2020. For that year, the Economist Intelligence Unit predicted a drop of 6.5% in Autumn 2020 that has become a decrease of -3.9% according to the latest publication.
THE SIZE OF THE MARKET
CSIL estimates that during 2020 the size of the US lighting fixtures market declined to a value of USD 19.5 billion, down by 4.2% as compared with 2019. The decline in the market is primarily due to the impact on demand associated with the Covid-19 pandemic. On the supply side, the production of lighting fixtures decreased by a similar amount (-4.3% year-on-year) and it is expected to keep declining also during 2021, at least during the first half of the year. According to preliminary trade data, imports of lighting fixtures have experienced a strong debounce while exports, although improving, still show negative rates of growth. As a result, the consumption of lighting fixtures is expected to increase by 7.2% in 2021 compared to 2020, thus exceeding the pre-pandemic level by the end of the year. However, it is worth noting that the consumption growth, mainly driving by imports, may be overestimated, eventually. In fact, the first three months of 2020 were the period in which international trade has been most affected by the pandemic crisis.
RESIDENTIAL SEGMENT PERFORMED BETTER
Within the lighting fixtures market, in 2020 the residential segment performed much better than the professional one. This statement is supported by the performance of constructions and the results of some of the leading players of the industry. During 2020, the value of the new constructions put in place increased by 12% for the residential building while it contracted by 2.9% for the non-residential ones.
A LOOK AT MAIN MARKET PLAYERS
The largest US home improvement centres, Home Depot and Lowe's, both reported double-digit growth in their lighting fixtures sales during the year. On the other hand, Acuity Brands, the market leader in the United States, reported a contraction of 7% in lighting sales during the first three months of 2021. This negative result was a continuation of the negative trend that affected the group's sales during 2020, accounting for 8% decrease on 2019. Within Hubbell's Lighting business group, net sales of commercial and industrial lighting products in 2020 decreased by approximately 22% compared to 2019 driven by lower overall market demand. Net sales of residential lighting products increased by approximately 6% in 2020 as compared to the previous year period due to strength in home centre and e-commerce sales, partially offset by weakness in home builder markets in 2020.