Global electronics market is growing less dynamically
ZVEI, the German electro and digital industry association, published their reports on the electronics market. While 2023 has generally seen average growth, they expect little movement in 2024 and a slight upturn starting in 2025.
The global market for goods in the electrical and digital industry was worth €5,847 billion in 2023. “This makes it one of the world's largest industrial markets. After high growth rates in 2021 and 2022, its growth momentum slowed to four per cent last year,” says ZVEI Chief Economist Dr. Andreas Gontermann. And for the current year, the ZVEI expects only a modest increase of one per cent.
Recently, the global industrial economy has been burdened by, among other things, the significant rise in interest rates since 2022 and increasing geopolitical uncertainties. For 2025, the ZVEI predicts a slightly better performance for the global electrical and electronics market (+3%), but this will still be below averages of previous years. The turnaround in interest rates that has since been initiated should at least help to improve the global propensity to invest again in the coming year.
Very little shift in continental market shares
Asia remained the largest continental market in 2023, with a volume of €3,556 billion and a global share of 61 per cent. Following growth of four per cent last year, the ZVEI forecasts growth rates of two and four per cent for 2024 and 2025 respectively. Within the continent, China's electrical and electronic equipment market reached a value of €2,214 billion in 2023 (+4% over the previous year). This means that it remains by far the largest national market in the industry. “However, our further expectations reflect the fact that China's economy has entered a phase of lower growth,” said Gontermann. The ZVEI is expecting growth of just three per cent in 2024 and four per cent in 2025.
The overall American market amounted to €1,197 billion in 2023 – an increase of four per cent as well with its global market being one fifth. According to forecasts, growth could stagnate in 2024 but expand with a modest pace of two per cent in the following year. In 2023, the US market reached a volume of €855 billion (+4% year-on-year), making it the second largest in the world, and its growth is expected to mirror that of the continent.
The European electrical and electronics market also grew by four per cent to a value of €971 billion in 2023, representing 17% globally. For this year, however, the ZVEI expects a decline of one per cent, and a slight growth of two per cent in 2025. “With a volume of €193 billion in 2023, the German market will still be the fifth largest in the world – behind China, the USA, Japan and South Korea,” says Gontermann. After growing by four per cent last year, a decline of four per cent is expected for 2024. This could then be followed by a two per cent increase in 2025.
The broad product range of the electrical and digital industry extends from industrial and capital goods, including automation, energy technology, electrical medical equipment, electrical installation or ICT, to consumer goods such as electrical household appliances and consumer electronics. The last relevant sector are electronic components, which are used as intermediate inputs virtually everywhere today.
Source: ZVEI
Image: ZVEI
Caption: The year-by-year growth of the electronics market, estimate for 2024 and forecasts for 2024 and 2025.