Electrical Engineering: quite positive performance of world exports in H1 2023

First reflections of the ecological transition on world demand for this industry ?

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Slowdown Conjuncture Global demand Check performance Export markets Foreign markets Uncertainty International marketing High-tech Global economic trends

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Among the industries most resilient to the current phase of contraction in international trade, there is the Electrical Engineering1, whose world trade in the first half of 2023 marked a trend growth of +4.6% at constant prices (against a performance of -2.3% for total goods2).
As documented in the article "First signs of the start of a global energy transition pathway", the Electrical Engineering industry highlights - together with the automotive industry and, to a lesser extent, of machinery and plants - the best performance trends.

Double-digit growth trend for worldwide sales of switchboards, electric motors, generators and transformers and electricity distribution and control equipment

World Exports of Electrical Engineering (evolution at constant prices)

Levels % Y-o-Y changes at constant prices
Sector Bn € 2022 Year 2022 Q1-2023 Q2-2023 H1-2023
Wires and cables, switches, plugs and sockets 249.0 + 5.0 - 0.2 - 4.9 - 2.7
Electric motors, generators and transformers 209.8 + 4.4 +13.2 + 9.8 +11.4
Electrical equipment parts 105.4 + 2.3 + 1.8 + 2.6 + 2.2
Switchboards 76.4 + 8.0 +17.4 +17.5 +17.5
Electricity distribution and control equipment 17.4 +12.1 +13.5 + 6.4 + 9.7
Other electrical engineering 33.3 - 1.2 - 8.2 - 4.2 - 6.1
TOTAL 691.3 + 4.6 + 5.9 + 3.3 + 4.6
Source: ExportPlanning-World Trade Datamart

Wires and cables, switches, plugs and sockets

Within the Electrical Engineering industry, we note the negative countertrend performance of world exports, measured at constant prices, of wires and cables, switches, plugs and sockets3, which in the first six months of 2023 showed a moderate trend decline (-2.7%) in the measurement at constant prices, penalized by the worsening of the most recent quarter (as documented by the graph below).

Despite the overall result of trend reduction, in the first half of the year a majority (56%) of international markets showed positive trend dynamics in the measurement at constant prices of world exports intended for them.
The most interesting cases, as they have offered the greatest positive contributions to the growth of world exports in the sector, are the markets of Thailand (+25.3 % trend, at constant prices), Singapore, France, India, Germany and Morocco (+26.1%).

Electric motors, generators and transformers

Among the most dynamic sectors within the electrotechnical industry, the performance of world exports stands out, measured at constant prices, of electric motors, generators and transformers4, which in the first six months of the year they recorded a growth trend of over 11 percentage points in the measurement at constant prices.
It is certainly a sector that plays a fundamental role in the ecological transition, as it is closely linked to energy efficiency, the integration of renewable energies and the reduction of greenhouse gas emissions5.

In a context of overall growth in the sector, in the first half of the year over 63% of international markets showed positive dynamics in the measurement at constant prices of world exports intended for them.
The most interesting cases, as they have offered the greatest positive contributions to the growth of world exports in the sector, are the markets of Germany and Netherlands (+48.8 percent compared to the first half of 2022), United States and, to a lesser extent, France, Ukraine (+302 per cent compared to corresponding period 2022, thanks to the excellent performance of Turkish sales), Spain.

Electrical equipment parts

The evolution at constant prices of world exports of parts for electrical equipment6, documented in the graph below, signals the maintenance of a moderate growth rate (+2.2% in the first half of 2023, at constant prices), in line with what has already been experienced in the 2022 average.

In a context of weak growth in the sector, in the first half of the year over 65% of international markets showed positive dynamics in the measurement at constant prices of world exports intended for them.
The most interesting cases, as they have offered the greatest positive contributions to the growth of world exports in the sector, are the markets of Vietnam (+22.3 % compared to the first half of 2022), Germany, Malaysia, Australia (+39.6%), Mexico, France and United States.

Switchboards

The switchboards sector7 showed, within the electrotechnical industry, the best performances in the first half of the year, with a growth trend of over 17 percentage points in the measurement at prices constants.
This is certainly another sector that plays a fundamental role in ecological transformation, since it is responsible for the management, control and protection of electricity networks8.

In a context of high growth in the sector, in the first half of the year almost 70% of international markets showed positive dynamics in the measurement at constant prices of world exports intended for them.
The most interesting cases, as they have offered the greatest positive contributions to the growth of world exports in the sector, are the markets of United States (+ 21.7% at constant prices compared to the first half of 2022), Germany (+24.7%), France (+35.2%), United Kingdom (+27.7%), Netherlands (+25.5%), Sweden (+ 38.3%), Brazil (+35.8%), Malaysia (+45.7%), Czech Republic (+25.5%).

Electricity distribution and control equipment

The evolution at constant prices of world exports of equipment for the distribution and control of electricity9, documented in the graph below, still signals, albeit slowing down in the most recent quarter, of high growth (+9.7% in the first half of 2023, at constant prices), only slightly less accelerated than what has already been experienced in the 2022 average.
Also in this case, it is a sector that plays a fundamental role in ecological transformation, as it is responsible for the design, production and implementation of equipment and devices used for the distribution, monitoring and control of electricity in the power grid10.

In a context of good dynamism in the sector, in the first half of the year almost 60% of international markets showed positive dynamics in the measurement at constant prices of world exports intended for them.
The most interesting cases, as they have offered the greatest positive contributions to the growth of world exports in the sector, are the markets of United States (+ 35.4% at constant prices compared to the first half of 2022), Germany (+37.7%), Saudi Arabia (+52.6%), Netherlands (+34.5%), Singapore (+68.5%), Mexico (+ 27.6%).

Conclusions

International trade data for the first half of 2023 document the continuation of an expansionary phase in world sales of Electrical Engineering products. A majority of international markets (68%) show positive dynamics (measured at constant prices) in the sales of Electrical Engineering industry products.

In particular, within this industry, some sectors (switchboards, electric motors, generators and transformers and electricity distribution and control equipment) - with a leading role in the global process of ecological transition - are experiencing particularly favorable performances.

The opportunity for companies in the Electrical Engineering industry to seize the growth potential offered by the most dynamic and positively impacted markets
by the ecological transition

For exporting companies in the Electrical Engineering industry (but not only) it therefore appears strategic to be able to identify the most dynamic international markets for their specific business area, on which to focus their actions marketing and business development.

1) For a description of the sectors included therein, see the related industry profile.
2) See the article "First Half of 2023: the economic outlook of World Trade".
3) For a description of the products included therein, see the relative sector profile.
4) For a description of the products included therein, see the relative sector profile.
5) For a description of the products included therein, see the relative sector profile.
6) Listed below are some key points regarding the role of motors, generators and transformers industry electricity in the ecological transition:
  • energy efficiency: electric motors are critical components in many devices and machinery used in various industries. They are widely used in industrial, commercial and domestic applications. Reducing the inefficiency of electric motors and increasing their energy efficiency is key to reducing energy consumption and greenhouse gas emissions associated with electricity generation;
  • Electrification of Transportation: the electric motor and generator sector is playing a key role in the electrification of transportation. The adoption of electric motors in vehicles such as cars, buses, trains and ships significantly reduces the environmental impact compared to internal combustion vehicles, as electric motors produce zero direct emissions during operation. This helps to reduce greenhouse gas emissions and improve air quality in urban areas;
  • renewable energy integration: electric generators are used to convert energy from renewable sources (such as solar, wind, and hydroelectric power) into ready-to-use electrical energy. This process is essential for the effective integration of these intermittent energy sources into the electricity grid, allowing for the reduction of dependence on fossil fuels and associated CO2 emissions;
  • transformation and distribution of energy: electrical transformers play an essential role in the transmission and distribution of electrical energy through the grid. The modernization and optimization of transformers make it possible to reduce energy losses during transport and improve the overall efficiency of the electricity system;
  • innovative solutions and advanced technologies: the electric motors, generators and transformers sector is constantly developing innovative solutions and advanced technologies to increase efficiency, reduce energy losses and support energy integration renewable. These advances help make electricity more sustainable and competitive with conventional sources.
7) For a description of the products included therein, see the relative sector profile.
8) The switchboards sector has the task of making possible an efficient, safe and reliable distribution of electrical energy, which is crucial for the ecological transformation. The growing integration of renewable energies and smarter energy management appear, in this historical phase, to be fundamental for achieving the objectives of sustainability and climate change mitigation. In particular, we note the role of electrical panels in the following areas concerning ecological transformation:
  • energy efficiency: switchboards are responsible for ensuring that energy is used efficiently. With increasing attention to reducing energy consumption and energy losses during distribution, electrical panels can be designed to maximize efficiency and optimize energy flow;
  • Renewable Energy Integration: ecological transformation relies heavily on the integration of renewable energy such as solar, wind, hydroelectric and other clean energy sources. Switchboards are responsible for connecting these energy sources to the electrical grid and managing their distribution in a consistent and reliable manner.
  • energy demand management: in a green electricity system, it is essential to balance the supply and demand of energy in order to avoid excessive waste and ensure a continuous and stable supply. Switchboards can be equipped with advanced demand management technologies to optimize energy use according to actual needs;
  • Advanced Monitoring and Control: modern switchboards can be equipped with advanced monitoring systems and automation technologies to enable more precise and timely control of the power grid. This can help reduce outages and improve network stability;
  • safety and reliability: in an ecological context, where different energy sources can be integrated into the grid, the safety and reliability of the electrical system are even more important. Switchboards play a crucial role in protecting the grid and ensuring that the flow of energy is controlled and safe;
  • Digitization and IoT: digitization in the control cabinet industry is gaining more and more importance. The Internet of Things (IoT) and sensor technology can be used to monitor the performance of electrical systems in real time and optimize the use of resources.
9) For a description of the products included therein, see the relative sector profile.
10) Listed below are some key points regarding the role of the electricity distribution and control equipment industry in the ecological transition:
  • Renewable Energy Integration: electricity distribution and control equipment allows renewable energy sources to be more effectively integrated into the electricity grid. This includes the intelligent management of energy produced from variable sources such as solar energy and wind energy, in order to ensure a stable and reliable supply of electricity, reducing dependence on fossil fuels and greenhouse gas emissions;
  • energy management systems: this sector is involved in the production of advanced energy management systems, which allow a better optimization of the use of electricity both at an industrial and domestic level. These systems can help monitor and regulate energy consumption, identify inefficiencies and promote more responsible use of energy;
  • Power Grid Efficiency: electricity distribution and control equipment is critical to improving the efficiency of the power grid. This means reducing energy losses during distribution and improving congestion and load fluctuation management. A more efficient electrical system means less energy loss and more clean energy available;
  • Intelligent Monitoring and Control: Advanced monitoring and control technologies enable more precise management of the power grid. This equipment can automatically detect anomalies or problems in the network, facilitating rapid response to outages and contributing to greater reliability of the electrical system;
  • smart grid: the concept of "Smart Grid" (intelligent electricity grid) involves the integration of advanced technologies in equipment for the distribution and control of electricity. A Smart Grid offers benefits such as actively managing supply and demand, balancing renewable energy sources, promoting energy flexibility and improving grid resilience;
  • industrial electrification: this sector also supports the electrification of industry, by replacing polluting energy sources with clean electricity in industrial processes. This helps to reduce the environmental impact of industrial activities and favors a more sustainable approach to production.