The results of the first State of the Sector survey for 2025 from Electrical Distributors’ Association (EDA) reveal a supply chain battling with rising businesses costs in every direction: wages, energy, rental costs for business premises, insurance premiums, as well as increases in the price of products supplied by manufacturers.
Over 41% of Wholesalers and 35% of Manufacturers reported a rent increase for their premises. Businesses were also seeing significant increases in the cost of business insurance premiums across car/fleet, healthcare, buildings, contents and trade credit, with some businesses seeing a rise in car/fleet insurance premiums in excess of 25%.
From increasing prices, through to reducing opening hours, EDA Wholesalers are faced with some difficult choices, as these results show:
In Q1 2025, EDA Wholesalers revealed their top three operational headaches as:
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Inflation in business overheads and passing these on to customers.
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Online prices making margins tight.
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Upward pressure on all wages driven by the increases in the National Living Wage and National Minimum Wage on the overall wage bill.
With the green technologies opportunity always high on the EDA agenda, the sector’s opportunity in heat pumps was also explored. Around 9% of Wholesaler respondents confirmed that they had entered this market during 2024, with a further 22% of respondents planning to follow suit during 2025. Encouragingly, 59% of respondents already trading in this market reported a small increase in demand during Q4 2024, with a further 24% reporting a moderate to significant increase in demand during the same period. One wholesaler commented that there is currently a “huge push in the Northwest to install heat pumps.”
Q1’s survey also explored the recent changes to Inheritance Tax: 29% of wholesaler and 17% of manufacturer respondents revealed that they are likely to be adversely affected. Their comments reveal their strength of feeling on this topic:
“This is the most significant long term negative impact on privately owned businesses that we face. The true impact will only be felt in 20 to 30 years’ time.”
“Farmers have got all the publicity, but this affects all medium sized family-owned businesses, which is a strange group to go after as they are credited with the longer-term view that allows business to grow sustainably.”
To help EDA businesses understand their Inheritance Tax options, the EDA is planning information sessions.
Every quarter since 2020 the EDA has invited its Wholesaler and Manufacturer Members to have their say on supply chain challenges and opportunities. The results provide important insight into the state of the UK’s electrotechnical supply chain and gives businesses the chance to benchmark their experiences against others in the sector. Forming part of the Association’s Industry Insight pillar, the results are analysed and presented at ‘Talking Shop’ online meetings: February’s ‘Talking Shop’ attracted over 125 attendees from EDA businesses with one adding “Fantastic overview with detailed insight and market appraisal.”
Over 78% of respondents that attended the Q1 2025 Talking Shop gave it 5 out of 5 stars. The full results of the EDA’s State of the Sector surveys are available at www.eda.org.uk in the Support and Resources menu. Registration for the next Talking Shop, which is on Friday 9 May 2025, is open at www.eda.org.uk in the Events section.