Contactor Market - Global Forecasts from 2023 to 2028

The global contactor market was valued at US$862.31 million in 2021 and is expected to grow at a CAGR of 6.71% during the forecast period

A contactor is an electrical switching device used to control the flow of electric power by establishing the connection between an electrical source and a load. Auxiliary contactors, power contactors, and spring-loaded contractors are the common types of contactors provided by the global contactor industry that are used in residential, commercial, and industrial settings as they can handle heavy loads. The surge in construction spending on residential, commercial, and industrial buildings is stimulating the demand for contractors, further bolstering the global contactor market size.

Market Drivers:

Increased construction spending drives the global contactor market growth

There is a rising need for effective power distribution and control systems as industrialization and infrastructure development continue to expand worldwide. Contactors play a crucial role in these systems by enabling the safe and efficient switching of electrical currents. Contactors are used in motor control circuits, lighting systems, HVAC systems, and various other applications where the control and protection of electrical loads are required. The increasing construction spending is expected to boost the global contactor industry growth. According to the European Construction Industry Federation report in 2022, the total investment in the construction industry increased by 5.2% when compared to the previous year.

Rising spending in residential settings

There is a rising need for residential buildings, including apartments, and houses as urbanization and population growth continue. These buildings require efficient electrical distribution and control systems to cater to the electrical needs of residents. Contactors are essential components in residential electrical systems, enabling the safe and reliable switching of power to various devices and appliances. They are used in lighting control, HVAC systems, motor control for pumps and fans, home security systems, and other household applications. The increasing number of residential buildings propels the global contactor market growth. According to the National Investment Promotion & Facilitation Agency of India in 2022, around 40 % population is expected to live in urban India by 2023, and this would create a demand for 25 million extra mid-end and affordable residential units.

Spending in commercial and industrial settings to offer market lucrativeness

There is a growing need for efficient electrical distribution and control solutions as the commercial sector expands with the construction of office buildings, shopping malls, hotels, hospitals, and other commercial establishments. Contactors enable the reliable switching and control of electrical power to lighting systems, elevators, escalators, security systems, and other building infrastructure. The sales of elevators to commercial settings expand the global contactor market size. In August 2022, Mitsubishi Electric Building Solutions Corporation announced that it sold 123 elevators to large office buildings in China.

Industrial buildings encompass manufacturing plants, factories, warehouses, and other facilities where large-scale production and industrial processes take place. These environments require efficient and durable electrical control systems to manage machinery, equipment, and power distribution. Contactors are used in industrial buildings as they facilitate the safe and efficient switching of electrical power to motors, pumps, conveyors, and various industrial equipment. The investments laid to improve manufacturing capacity will accelerate the global contactor market growth. Under the Union Budget 2021-22 of India, funding of INR 1.97 lakh crore (over US$ 26 billion) was announced to enhance India’s manufacturing capabilities and exports.

Asia-Pacific region is expected to be the significant contactor marketplace

The Asia-Pacific region will account for a significant share of the global contactor market due to a surge in the construction of commercial and residential spaces, and establishments of industries in the region. In 2021, the Chinese government introduced the 14th Five Year Plan (FYP), which urged China to accelerate the building of new infrastructure in the years leading up to 2025, covering a wide range of industries, from gigabit fiber optics to space-based manufacturing.  In 2023, the budget for the Pradhan Mantri Awas Yojana, the flagship housing scheme by the government of India was increased to Rs. 79,590 crore (US$ 9.6 billion) in Union Budget 2023-2024. These initiatives boost the construction of residential and industrial spaces and thus lead to improving the regional contactor market size.

Market Restraints:

Substitute availability will restrain the global contactor market growth

Solid-state relays (SSRs) are electronic switching devices that can perform similar functions as contractors. The increasing adoption of SSRs, especially in certain applications such as low-power control circuits, can pose a challenge to the expansion of the global contactor market size, as they offer advantages like smaller sizes, faster switching speeds, and longer lifespans. For example, in September 2022, Isocom Limited launched a latching solid-state relay that would switch many currents up to 60Amps with the additional benefit of positional memory, being on or off, and remaining in the last position until a new signal current forces it to the original position.

Key Developments:

• April 2023: Schaltbau launched a new contactor for electromobility optimized to meet the requirements of 800V vehicles and is shock resistant up to 120g/20m. The contactors are only activated when charging at 400V charging points and do not consume any power either when driving or charging at an 800V charging point.
• April 2023: Littelfuse introduced "DCNLR Series DC contactors " which were available with continuous current ratings up to 500 A and maximum voltage ratings up to 1,800 V for eMobility and industrial applications.
• September 2023: Sensata Technologies, in its press release, announced the launching of GTM400 and GTM500 bidirectional contactors for applications like energy storage, DC fast charging, and heavy-duty vehicles. The contactor launched can withstand applications up to 1500V.

Segmentation

By Type

• Auxiliary Contactors
• Power Contactors
• Spring-Loaded Contactors

By Current Type

• AC Contactor
• DC Contactor

By End-User

• Residential
• Commercial
• Industrial

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• UK
• France
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Others
• Asia Pacific
• China
• Japan
• South Korea
• India
• Australia
• Other