Producers and sellers of light-emitting diode (LED) technology can count on more growth over the next three years, as world demand for higher value lighting technologies continues to grow.
A new report from the Freedonia Group projects worldwide demand for lighting in general to rise 12% per year through 2016, with LED lighting devices dominating the future gains. The report cites the rising availability of LEDs and other high-efficiency light sources at more affordable prices and with improved light quality as key reasons for the shift. Acceleration in personal income and economic activity in developing regions combined with an increase in global motor vehicle output and construction spending are also key factors.
Freedonia expects world demand for lighting to hit $78 billion by 2016.
The increase in demand for LEDs marks a key change in the lighting market, as demand for these products historically has been restrained by high prices and technical deficiencies in the quality and diffusion of light, the report states. Advanced technology is improving LED performance and leading to lower prices, allowing the technology to better compete with products such as compact fluorescent lamps (CFLs), which contain mercury. CFLs are expected to see more limited growth going forward, due in part to concern over how to safely dispose of them.
Regionally, China and other developing countries are expected to outpace electric lighting sales in the United States, Europe and Japan. China will account for nearly 50% of all additional product demand through 2016, the report says, strengthening its position as the largest national market for lamps and LEDs. Russia, Mexico and Brazil also are expected to see above-average growth in lighting demand. The growing standard of living in these regions, combined with government and business incentives, will spur much of the growth.
Poland and other parts of Eastern Europe are expected to post similar gains as economic conditions improve in that part of the world.