Global Electrical Enclosure Market is Estimated to Witness High Growth Owing to Increasing Infrastructure Development and Growing Industrialization
The global electrical enclosure market is estimated to be valued at US$ 53.26 Bn in 2024, exhibiting a CAGR of 5.3% over the forecast period (2024-2031). Growth in the construction industry along with rising expenditure on infrastructure development across major countries is driving the demand for electrical enclosures. Furthermore, rapid industrialization and increasing automation in various end-use industries, such as oil & gas, power generation, and manufacturing, is further augmenting the market growth.
Market Dynamics:
The growth of the global electrical enclosure market is determined by two key drivers - increasing infrastructure development and growing industrialization. Rising construction activities around the globe especially in developing nations of Asia Pacific and Latin America have boosted the demand for electrical enclosures from the construction sector. Furthermore, rapid industrialization leading to the growth of process and discrete industries is another major factor augmenting the market growth. Industrial automation and use of robots helps improve the productivity and efficiency of operations. This has propelled the installation of various electrical components requiring enclosures for protection.
Increasing Investment in Renewable Energy Projects is Driving the Demand for Electrical Enclosures
The increasing investment in renewable energy projects such as solar PV and wind farms around the world is one of the key drivers boosting demand for electrical enclosures in the global Electrical Enclosure market. Renewable energy requires large electrical infrastructure to generate, transmit and distribute the power generated. This electrical infrastructure utilizes a variety of electrical enclosures to safely house low and medium voltage switchgear and control equipment. Countries around the world are committing significant funds to scale up renewable energy capacity as part of their national climate change mitigation plans. This rising investment in green energy is translating to increased demand for electrical enclosures to support the growing renewable energy infrastructure.
Modernization of Aging Power Infrastructure is another Major Driver
The aging of conventional power grids and infrastructure in many developed markets is another prominent driver for the electrical enclosure market. Power networks in countries like the U.S., Germany, Japan, etc. have been in operation for several decades and are in need of upgrades to address reliability, efficiency, and safety issues. This provides lucrative opportunities for enclosure manufacturers to provide replacements and retrofitting solutions. Infrastructure modernization programs earmark billions of dollars towards replacing outdated switchgear, transformers and other electrical equipment. Since these components require enclosures for protection, their replacement cycle drives enclosure replacement as well.
Volatility in Raw Material Prices is a Major Restraint
Fluctuating prices of key raw materials used in enclosure manufacturing such as steel, aluminum and plastics pose a major restraint on the market. Steel accounts for a significant portion of the total enclosure product cost. International steel price volatility, influenced by factors like global trade policies and demand-supply dynamics, directly impacts manufacturer margins. This adversely affected many steel enclosure manufacturers. Similarly, fluctuating oil prices impact plastic resin input costs which are a challenge to manage efficiently. Unpredictable raw material costs make forward planning difficult for electrical enclosure suppliers.
Intense Competition is another Hurdle
The electrical enclosure market has been highly competitive over the years with the presence of numerous global and regional suppliers. Manufacturers compete based on product quality, design capabilities, delivery times as well as pricing. In such an environment, it becomes difficult for any single player to gain significantly higher market shares. Established large firms also find it challenging to offer differentiated value in such a commoditized market. The competitive pressures discourage excessive profit margins and new market entrants also find it hard to scale up. While competition spurs innovation, intense rivalry has been a restraint causing market share wars among players.
IIoT and Industry 4.0 Present Major Growth Opportunities
The ongoing digital transformation of industries through initiatives like the Industrial Internet of Things (IIoT) and Industry 4.0 is opening huge opportunities for enclosure manufacturers. The core ideals of these concepts around connectivity, remote monitoring and data analytics require electrical enclosures to house additional control systems, sensors and networking hardware. Enclosures tailored for IIoT/Industry 4.0 applications that provide power, data and space for new technologies within harsh factory environments are in growing demand. They allow industries to upgrade existing infrastructure with minimal rework. The global IIoT market itself is projected to be worth over $1 trillion by 2022 according to various estimates. This presents enormous prospects over the long term for enclosure providers to participate in the smart manufacturing revolution.
Infrastructure Development Projects in Emerging Nations
Mega infrastructure development projects underway in emerging nations across sectors like transportation, urbanization and energy also open attractive opportunities. Countries like China, India, Indonesia, Saudi Arabia and others are undertaking massive infrastructure stimulus programs. This includes projects for high speed rails, new airports and smart cities that require extensive low-voltage power distribution systems. The electrical enclosures segment stands to significantly benefit from such spending towards developing reliable power networks to support infrastructure growth.
Link: https://www.coherentmarketinsights.com/market-insight/electrical-enclosure-market-5442
Key Developments:
- In October 2022, Tri-Mack Plastics Manufacturing Corp, known for its expertise in high-performance thermoplastic components, unveiled a new lightweight and high-strength enclosure. This enclosure, constructed from unidirectional (UD) carbon fiber-reinforced thermoplastic (CFRTP) tape, features a thickness of only 0.40 inches.
- In July 2022, Schneider Electric, a worldwide leader in energy management and automation, introduced the PrismaSeT S series. This new line of enclosures makes installing electrical distribution in commercial and industrial buildings as simple as it is in residential settings, while also providing superior durability for challenging applications. Additionally, PrismaSeT S aligns with Schneider Electric’s sustainability goals by using recycled plastic materials in its production.
- In March 2022, Magna International Inc., a top global automotive supplier, revealed plans to expand its battery enclosure operations in Canada to support new contracts with Ford Motor Company. The expansion includes a 170,000-square-foot facility that will generate up to 150 new jobs and manufacture battery enclosures for the Ford F-150 Lightning.
- In February 2022, Siemens, a global leader in industrial automation and digitalization, joined forces with Nexii Building Solutions to launch an innovative, sustainable EV charging concept. VersiCharge XL is tailored for large-scale fleet electrification and high-demand charging needs. Its modular and scalable design allows for the quick and efficient electrification of both new and existing parking lots and building facilities.
Key Player:
ABB Ltd, Adalet, Austin Electrical Enclosures, Eaton Corporation, Eldon Holding AB, Emerson Electric Co., Hubbell Inc., Legrand SA, Pentair PLC, Rittal GmbH & Co. Kg, Schneider Electric SE, Siemens AG, nVent (Eldon Holdings), AZZ Inc., and TE Connectivity
