The Catastrophic Impact of Covid-19 on the Global Utility Poles Market
The global utility poles market has experienced a massive downfall during the COVID-19 pandemic. This is mainly because of shutting down of construction sites all over the world. As the world went under a complete lockdown, the demand of the industry has also downgraded resulting in huge loss. Research has confirmed that the industry will be revived towards the 2nd or 3rd quarter of 2022.
We can see the utility poles everywhere in the roads. The utility pole is a structure which is secured into the ground. With the help of these poles, public utility equipment such as telephone wires, power lines, and other types of cables, streetlights and traffic light related equipment are given overhead support. The poles are found in different materials and height. Different methods are used to anchor then into the ground. There are instances when a single pole is designed in such way that it can support various types of public utility apparatus.
Utility poles are basically made of metal, wood, concrete, and composites such as fiberglass. Sub transmission lines and distribution lines are the two different types of power lines for which these poles are used. The sub transmission lines carry higher voltage power between substations, and Distribution lines distribute lower voltage power to customers.
Pre COVID-19 Industry Scenario
In recent times, the usage of utility poles has been increased in the electricity sector which led to the rising demand. This is the reason the global utility poles market has recorded a major growth. Another sector encouraging the demand of the market is the telecommunication sector.
Apart from these, there are some other factors that drive the growth of the utility poles market. These factors include the extension of the global telecommunication industry, growing ratio of global energy consumption, and approval of steel as a green material.
As mentioned earlier, the main function of utility poles is to support and connect electric wires that carry electric current. Energy transmission and energy distribution are the two major applications of the utility poles as they play a crucial role in supporting utility infrastructure and meeting energy needs as per the industry demand.
Current State of the market
The outbreak of COVID-19 pandemic across the world earlier this year (2020) has impacted the world economy like never before. Countless industries have undergone the devastating consequences of the pandemic. While some industries are shut down forever, some are facing massive downfall. This is because of the lockdown imposed all across the global to curb the spread of the lethal disease.
This pandemic has affected the utility poles market in a negative way. Shutdown of construction work and other related industries have hindered the growth of the market. And this downfall has been measured quite severe.
An extensive study conducted by ICRA, a unit of ratings organization ‘Moody's’, has asserted that the estimated losses at state-run electricity distribution utilities or Discoms would rise two-thirds to Rs 50,000 crore in FY21 with an addition of Rs 20,000 crores in book level losses in the current year (2020) itself. The study also asserts that the COVID-19 outbreak has reduced the power demand in the month of March and April, and, such fall have noticed first time ever in the industry.
The Post Pandemic Forecast
The leading players of the market are currently emphasizing particularly on developing successful strategies to revive and sustaining the position in the market once the pandemic is over.
In the post-pandemic period, the increasing investment in the power sector and improvement in transmission and distribution network in various region across the globe is forecasted to contribute to the revival strategy of the industry. More investment opportunities will be open in the industry after the pandemic. The government of Kenya is planning to provide free electricity to all the residents by 2022 by launching various plans, which is definitely a praise-worthy step.
Research has indicated that the market is likely to revive from the devastating situation by Q3/Q4 of 2022. An increased level demand of utility poles is predicted once the electricity and other supplies market resumes.
Governments are also making reforms in lockdown policies and resuming construction operations at the earliest. Government has made it a mandate for the buyers to buy electric appliances from government shops, which is predicted to eventually help the economy of the country.
For instance, the Indian government has asked the buyers of electricity industry, including DISCOMs, to purchase the items for the construction purposes to boost the country’s economy. In addition, many developed countries such as US are also making more efforts to implement large scale debt driven measures.
With the downward curve of COVID-19 in many countries, lockdowns are being lifted and the wheels of economy are resuming. Many industries have started their production and manufacturing works so that it can prevent any upcoming recession. The growth of utility poles market is also expected to continue in the time to come.
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