January, 17, 2023
By David Gordon
Highlights from our recently released 2022 Q4 Pulse of Lighting report included:
- Manufacturers, reps / lighting agents and distributors each reported mid-single digit performance
- Busiest market segments are small and medium new and renovation construction markets. Large projects are market specific and dispersed and manufacturers see capital spending for large projects slowing.
- There is a sense of distributors possibly working down their inventory, however, new multi-use products (tunable wattage products) create opportunities for distributors to reduce their inventory.
- Over 2/3rds of distributors reporting having some projects delayed due to product delays in other product categories, especially switchgear
- Some report that projects have been cancelled due to the economy and/or labor issues.
- Some supply chain issues remain, at least for some, although container rates have dropped significantly.
- 40-50% of specifiers, according to reps and manufacturers are seeing a slowdown / are concerned looking out over the next 6 months. Filling backorders and local conditions are the key, which infers that “success” may not be spread throughout the country and winning will be “ground warfare.”
- Pricing was relatively flat in Q4.
And for 2023 …
- Distributors expect a couple of points lower for Q1 but, ending a little higher but still low mid-single digit growth for the year.
- Manufacturers are a little more optimistic for 2023 albeit mirror
- Reps are projecting lighting market performance in line with their distributors but significantly less than manufacturers.
- We asked each audience to rank key drivers of success in 2023
- There is nominal conviction about price increases for Q1, an indication of a competitive market, declining supply chain issues (and costs) and a weakening market where price returns as a more important decision criterion.
From a sales growth viewpoint, it appears that lighting may be reverting to the historical electrical distribution industry mean.
To learn more or buy the report, click here