Terminal blocks are modular, insulated blocks which connect two or more wires together, usually made of an insulating body and a clamping device for completing the connection. Wires are clamped down to the metal part with the help of a screw. Growing urbanization and industrialization has led to a high demand for terminal blocks, thereby driving the market towards growth.
The global terminal block market which was estimated to be worth USD 3.21 Billion in 2015 is expected reach a size of USD 4.64 Billion by 2022, growing at a CAGR of 5.5% during the forecast period 2016 to 2022.
Terminal block market to flourish in APAC
Rapidly growing industrialization in the APAC region since the past few years, particularly in developing countries, such as China, India, and Indonesia, among others has attracted a lot of businesses to get their products manufactured in this region even though they are based in Europe and North America. This is mainly because low cost of production in developing countries as compared to that of the developed countries, thus aiding in increasing their profit margins. Furthermore, it helps to avoid strict environmental laws in developed countries, build good ties with other countries, and get access for further productions. Therefore, increased industrialization in APAC is majorly fueling the growth of the terminal block market in this region. In addition, growing demands for HVAC equipment from APAC, particularly China, Japan, and India is expected to further drive the global terminal block market towards growth.
How will industry control, HVAC, and instruments benefit the market growth?
Industrialization and factory automation and instrumentation in process plants have been growing rapidly over the past few years. Advancements in terminal blocks, especially with respect to functions and termination technology, make terminal blocks preferable in various industries for the connection of various circuits or wires.
The global industry controls and factory automation markets are primarily driven by the increasing adoption of automation in factories in the U.S., China, and Germany, which in turn drive the global market for terminal blocks for the industry controls sector. APAC is the leading region in the global telecom market, which is dominated by countries such as China, Japan, Hong Kong, Malaysia, India, South Korea, and Vietnam. Moreover, increasing government initiatives in the telecom market fuels the growth of the telecom market, which is expected to further boost the demand for terminal blocks over the forecast period.
In addition, rapid urbanization, increased construction activities, rise in disposable incomes, stringent energy regulations, financial incentives through tax credit programs for energy-efficient HVAC systems, and technological innovations are some of factors boosting the growth of HVAC industry, thereby fostering the growth of terminal block market as well.
Major factors driving the global market for terminal blocks
The global market for terminal blocks is being majorly driven by factors such as the growing PCB market and rising demand for PCB terminal blocks, advancements in various connection technologies for terminal blocks, increasing demand and adoption of multipurpose, multifunctional, intelligent, finger-safe terminal blocks, and growing adoption of terminal blocks in the telecom sector. Apart from these, rise in demand for micro-miniaturized terminal blocks and rapid industrialization and urbanization in developing nations is expected to create an array of opportunities for the growth of this market over the coming years.
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Restraints and challenges being faced by the market players, and steps being taken to overcome them
Cyclic nature of some of industries such as automobile, consumer goods, machinery, and tooling is one of the major factors that may hamper the growth of this market. Terminal block manufacturers are likely to face challenges like designing in surface mount technology (SMT) terminal blocks, which they have to take into account while developing products for surface-mount applications. SMT requires advanced designing, production process, highly skilled staff, and intelligent technology as compared to through-hole technology.
Key growth strategies implemented by market players for sustenance
The major vendors in the global market for terminal blocks include PHOENIX CONTACT GmbH & Co. KG (Germany), Weidmüller Interface GmbH & Co. KG (Germany), WAGO Kontakttechnik GmbH & Co. KG (Germany), Wieland Electric GmbH (Germany), ABB Group (Switzerland), Rockwell Automation, Inc. (U.S.), WECO Electrical Connectors Inc. (Canada), Eaton Corp. Plc (Ireland), Molex, LLC (U.S.), and METZ CONNECT (Germany) among others. The key strategy adopted by major players in the market was of new product launches, which accounted for 79% of the total share of all strategies. Some of the companies adopted this as their major strategy in order to increase their share in terminal block market. For instance, recently PHOENIX CONTACT GmbH & Co. KG, which is one of the leading players in this market, introduced knife-disconnect terminal block, which features a quick and safe-finger actuation mechanism for test and measurement applications. Apart from this, mergers & acquisitions, partnerships, collaborations, and business expansions were some other strategies adopted by the market players in order to cater to the needs of this market.