The goods in view
The E/D/E supplier and product group management supports our members across all product categories with a high level of expertise. In close collaboration with other service areas, our experts ensure an attractive product range design – customised for the various target groups. This benefits both members and contract suppliers.
Dynamic developments and economic challenges
- The industrial business was characterised by stability in 2023.
An increasing number of target group-specific offers and concepts are in
demand. - The construction sector was characterised by a sharp decline in new construction activity and a partial reluctance to invest in energy-efficient renovations.
- Reluctance to spend and uncertainty among many private consumers weighed on the retail sector in 2023.
The industry relies on smart supply concepts
In the industrial business, the year 2023 was characterised by stable development and increasingly digitalised procurement. Efficient processes and maximum reliability are particularly important for the supply of C-Parts/MRO (Maintenance, Repair and Operations). In this context, the E/D/E has successfully supported the trade sector in over 70 C/MRO optimisation projects.
Dynamic growth and new customer group corporate groups
With demand-orientated supply chain management, the distributors within the association have succeeded in tapping into new customer groups up to the corporate level. Process analysis by the E/D/E Supply Networks/Industrial Services division is a key to success: with its consulting and analytical support for C/MRO projects the trade sector possesses a convincing unique selling point.
More than
C/MRO optimisation projects
The industrial business with intelligent supply concepts is also expected to register dynamic growth in the coming years – while at the same time increasing in complexity. E/D/E has positioned itself as an expert in this area as part of its vision for the future, and supports its members with measures such as training, events and customer projects in industrial business for growth-orientated market development. The partners benefit from the service portfolio, roughly 40 years of experience in the industrial business and from innovative, AI-based solutions for optimised procurement.
Tools: focus on inventory optimisation
The tools product range showed stable development overall in 2023. Growth above the general market trend was recorded, in particular, for precision tools (+2.1 per cent) and hand tools (+5.8 per cent) – with increased demand from both the craft sector (renovation and modernisation) and the industrial business. Trading volumes for machines and tools for woodworking and for power tools both fell by more than 10 per cent. The online sales channel was particularly decisive for power tools.
A clear trend towards strengthening the E/D/E warehouse business is visible across all product areas. This can be explained by both an optimised capital commitment and a reduction in inventories on the distributor side. In addition, streamlining process costs leads to cost reductions in the trade sector. As a result, the E/D/E warehouse business developed positively.
Growth through industrial PPE distributors within industrial business
The Technical Trade product range closed 2023 with a decline in trading volume of 5.5 per cent. The expansion of the supplier portfolio and the increase in trading volume at European level, in particular, had a positive effect. Contrary to the market trend, the E/D/E and its members were able to increase the trading volume in the PPE product range by 5.1 per cent compared to the previous year. The industrial business, in particular, developed positively here.
Normalisation of prices in welding technology
The sharp rise in prices for welding technology products has calmed down noticeably in 2023. As a result, the invoiced trading volume has also decreased. Thanks to numerous new members, the E/D/E welding technology division has been able to develop positively, and will continue to focus on gaining new contract suppliers and members in 2024.
Positive development at PLUS 1 and HANDWERKSTADT
per cent in Warehouse Business
Auch in den kommenden Jahren dürfte das Industriegeschäft mit intelligenten Versorgungskonzepten dynamisch wachsen – bei gleichzeitig zunehmender Komplexität. Das E/D/E hat sich im Rahmen seines Zukunftsbildes in diesem Bereich professionell aufgestellt und unterstützt die Mitglieder durch Maßnahmen wie Schulungen, Veranstaltungen sowie Kundenprojekte im Industriegeschäft zur wachstumsorientierten Marktbearbeitung. Die Partner profitieren von dem Leistungsportfolio, rund 40 Jahren Erfahrung im Industriegeschäft sowie innovativen, KI-basierten Lösungen für eine optimierte Beschaffung.
Noticeable restraint in the construction industry
A decline in building applications and permits of up to 30 per cent in the residential construction sector alone, high construction prices, rising interest rates, high energy costs and the shortage of skilled workers put pressure on the construction industry in 2023. Accordingly, the development of the industrial B2B sector in the construction-related E/D/E product ranges declined. The fastening systems division was hit the hardest, as market prices fell significantly. The building elements product range recorded a comparatively small decline with renovation measures and building in existing properties triggering a stabilising effect.
The decline in construction activity also led to lower trading volumes for window and door fittings. On balance, the trading volumes within the association developed at a better level than the market as a whole. The collaboration with the EURO Baubeschlag-Handel AG played a major role here: the EBH stands out positively with its sales-orientated project work and thus managed to overcome difficult times for the construction industry with industry partners and members.
The overall demand for construction equipment declined in 2023. The E/D/E construction equipment sector developed better than the market as a whole, with new European collaborations in particular, providing growth impetus.
The Construction Equipment Marketplace has once again proved its worth as a platform for exchanging experiences.
Overall, no significant recovery is expected for the construction industry in 2024. It is therefore all the more necessary to provide services that ensure greater process efficiency. In this context, digitalisation and the automation of work processes – including with the help of artificial intelligence – will play a major role. The E/D/E supports the specialised trade on many levels – from optimally maintained product data to high-performance logistics.
Improve process efficiency
The switch in goods procurement to the eLC warehouse in Wuppertal enables distributors to order their customised stock range directly – at fixed logistics costs, without ancillary order costs and industry minimum quantity surcharges. At the same time, the distributor’s stock can be optimised to a significant extent. Another key digitalisation topic in the construction industry is Building Information Modelling (BIM). Together with the Fraunhofer Building Innovation Alliance, the E/D/E has organised workshops to prepare members who are active in the property business for the process of future planning and tendering procedures.
Retail trade characterised by reluctance to buy
The retail sector also faced major challenges in 2023. The general reluctance to buy was compounded by the effects of a cold and rainy spring that lasted until the beginning of May. On balance, the summer was also unable to compensate for the drop in sales in the garden technology trade. Mixed weather conditions and high stock levels initially led to a weak performance in the motorisation sector. From the middle of the year onwards, the season was more satisfactory. Nevertheless, a decline of 4.5 per cent has been recorded in 2023 for the relevant E/D/E product ranges.
Uncertainties influence the HVAC sector
The HVAC sector was characterised by tremendous uncertainty in 2023. There was a sharp decline in new construction, while the general economic uncertainty and high energy costs led, in many cases, to projects being postponed to the renovation sector.
Heating on the upswing, sanitary and installation weaker
The demand within the “WUPPER-RING” has also developed in very contrasting ways in the three product areas of heating, sanitary equipment and ventilation/air conditioning. Heating and ventilation/air conditioning were clearly within positive territory. The sanitary equipment division performed significantly worse with a double-digit decline compared to the previous year. The installation sector also fell short of the previous year’s figures. The primary reason for the negative trend in the sanitary sector was the deterioration in consumer confidence among private households. Bathroom renovations are increasingly seen by private households as an “optional measure” that is foregone in economically uncertain times in favour of measures that are absolutely necessary such as replacing the heating system.
By contrast, demand for energy-efficient refurbishments remained high. This development was driven by the desire for independence from fossil fuels, the reduction of heating costs and the utilisation of the subsidies on offer. This benefited the heating segment in particular.
A tense market situation in most European countries also affected the business development of our European partner VGH International in 2023. The downturn in the construction industry and high interest rates were the decisive factors here. While trading volumes in the sanitary equipment sector declined significantly, high demand in the heating product range provided positive stimulus – albeit at a slower pace. For the current year, the VGH does not anticipate a revival and renewed growth in demand until the second half of the year.
The collaboration partner IGH invoiced E/D/E for a volume just above that of the previous year. This result is due not least to the development of new partnerships in the Eastern European market and a new cooperation in Italy. The collaboration with the E/D/E and the utilisation of the central warehouse have helped to maintain domestic business through fast deliveries.
Sharp fall in steel prices
In the steel sector, following a year of unprecedented record prices in 2022, purchase and sales prices in 2023 collapsed by over 50 per cent in some cases. Despite these negative conditions and declining demand, the ESH EURO STAHL-Handel succeeded in almost maintaining the total tonnage invoiced via the E/D/E system.
At the same time the ESH continued to focus on supply partners, in order to achieve price advantages for members and create additional expertise – particularly in the areas of bar steel, tubes and sheet metal. We also succeeded in increasing the focus on E/D/E for reinforcing steel and mesh. Collective purchasing and daily dialogue with members and supply partners made it possible to react quickly and competently to rapidly changing market conditions. The “SteelPower” and “SteelFocus” performance groups were integrated even more effectively, including to create administrative advantages. The ESH also provides advice and support in the areas of sustainability and green steel. Environmental declarations from various suppliers can be downloaded from the ESH portal. The ESH also offers members and manufacturers a space to discuss the opportunities and benefits of green steel.
Outlook
The economic outlook for the current year shows a differentiated picture for industry, trade and construction. Sectors of the industry are focusing on new sales markets such as renewable energies, hydrogen supply and defence. In the construction sector, 2024 will be another challenging year. High-level interest rates and elevated prices for construction products are causing investors and house builders to hold back. The construction industry and the factory equipment sector are expecting losses due to a lack of investment. It is also anticipated that capital goods will be restrained, and that there will be a significant decline in major projects in the first half of 2024. The refurbishment sector is likely to have a stabilising effect at best.
Like the German construction industry, the HVAC sector is characterised by genuine uncertainty. A tense market environment is also expected in 2024. The new construction business is likely to stagnate further, and the heating sector is unlikely to match the high growth rates of previous years – on the contrary, slight declines are possible in this segment for the first time after two successful years. A slight recovery is expected in the motorisation sector.
