Analysis of the electrical industry for the current year and beyond

The health consequences of the corona pandemic shaped the last year and thus also the economy and social life - not only in one country but worldwide. Now that a vaccine is available, it is important that the number of new infections is sustainably reduced so that the recovery, which has already started in some cases, is not slowed down. At many companies, the order books are full again, almost as they were before the pandemic. Even industries such as tourism, hotels and restaurants see light at the end of the tunnel, and the discussion has already started whether "vaccinated" people should receive some kind of bonus over "non-vaccinated" people.

One thing is for sure; however, the world has changed dramatically as a result of Corona and will continue to change. Compulsory presence in the office, and intensive travel activities, especially abroad, are a thing of the past. The whole thing will be replaced by video conferences, webinars, digitally held meetings and press meetings. Catalogs and brochures are already available at many companies in the electrical industry, only online and no longer in print, and this means considerable cost savings.

As we wrote on December 3rd, 2020, the weak second quarter was followed by a surprisingly good third quarter with, as we now know, a more or less conciliatory end to the fourth quarter. Due to the availability of the corona vaccine, the recovery in the electrical sector could continue from the middle of the current year. Whereby there will be significant differences between domestic and foreign sales. Only from 2022 will the figures then show some consistency again, without probably reaching the level of the pre-pandemic years.

China: Has risen to become a superpower in recent years and everything is approached strategically and in 5-year plans. The project "Made in China 2025" leads directly to 2049, when the aim is to be the world's leading industrial nation on the centenary of the Communist Party. It is the goal of the communist leadership to become the No.1in the world and gigantic sums of money are being made available for this.

Just think of the “New Silk Road” project or, in Germany, the takeover of Kuka by the Chinese investor Midea in 2016, or Osram / Ledvance in 2015/2016.

It is the goal and the strategy of the Chinese investors to acquire specialist knowledge and innovative technologies (patents and know-how) in Europe and the U.S., for which they then lure "with the huge market that is now available to you". Small and medium-sized enterprises (SMEs) in particular are now on the shopping list, and they are now happy about the additional turnover (“We are now also in China”) and hardly realize that they are giving up their independence, whereby in the opposite case a complete takeover of a Chinese manufacturer by a foreign company is not possible at all.

And the investments affect not only Europe and the USA but also Africa. Among other things, they want to secure the huge reserves of raw materials there; and at the same time also trade, using the knowledge and components that were previously acquired in Europe or the USA, for example.

Africa: Not to be forgotten is the Pan-African Free Trade Area (AfCFTA) with 54 member states and 1.3 billion people, which came into force on January 1, 2021, due to Corona six months later than originally planned. The aim is to have tariffs and trade restrictions removed from virtually all goods and services, but there is still a long and arduous road to go. But forward-thinking companies could also benefit from one of the largest free trade zones in the world.

United States of America: As we regularly report in our industry news at electro-insider, large companies such as Eaton or Honeywell are in the process of expanding their sphere of activity.

The purchasing and marketing associations are working on taking over groups that strengthen the association as a whole with new services, e.g. sanitary or safety products, and give the new distributors a new home, e.g. AD in Wayne / PA

Traditional wholesalers like Wesco, Home Depot or City Electric Supply, continue to grow, with CES better known in Europe as City Electrical Factors (CEF) from the United Kingdom.

Much will of course depend on the newly elected President, Joe Biden, as to how he can now unite the country, even after the most recent incidents, e.g. the storming of the Capitol in Washington.

In one of the next issues, we will also talk about Europe, about India and the online trade, which is becoming more and more important, and thus represents a serious threat to the retail trade.