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SOURCE: IBISWorld Inc.
In the next five years, industry growth will be driven by improvements in the US real estate market as the residential, industrial, commercial and municipal building construction markets all rebound from cyclical lows. For these reasons, industry research firm IBISWorld has updated a report on the Electricians industry in its growing industry report collection.
Los Angeles, CA (PRWEB) December 28, 2012
The Electricians industry, one of the largest subcontracting industries in the United States, has stumbled during the past five years in response to contractions across its downstream construction markets. Firms generate a large portion of revenue from electrical system installations in new residential and nonresidential structures, as well as from repair, retrofit and maintenance work. “As the general level of economic activity slowed during the recession, developers, home builders and businessowners canceled or postponed construction projects that required electrical installation,” says IBISWorld industry analyst Matthew MacFarland. “As a result, demand for electrical contractors waned in the five years to 2012.” Revenue is expected to decline at an average annual rate of 5.2% during this period to reach $110.4 billion in 2012. At the height of the recession in 2009, revenue plummeted 20.0%, representing the industry's steepest revenue decline over the five-year period.
As a result of weakened demand from the downstream construction markets, the number of firms, establishments and industry jobs is also expected to decline over the five years to 2012. “As economic pressures reduced the pool of available work for electricians, intensified competition forced firms to lower prices, and many companies were unable to compete,” adds MacFarland. “These firms resorted to shutting down branches and laying off employees in an effort to cut costs and preserve profit.” Nonemploying firms without the luxury of reducing wages or closing branches struggled to stay in business. Over the five years to 2012, the number of industry enterprises is expected to decline at an annualized rate of 0.8% to total 204,367 in 2012. The majority of operators in the Electricians industry are smaller firms that serve the single-family housing market in narrow geographic areas. The industry's low level of market share concentration is expected to continue in the five years. More firms are expected to enter the market as the construction sector improves, but the majority of these operators will be smaller firms and nonemployers that left the industry during the recession.
Construction markets have shown signs of life in 2012, though; for example, the value of residential construction is expected to post strong 11.3% growth. In turn, industry revenue is expected to reflect downstream demand growth with an increase of 5.0%. In the five years to 2017, industry revenue is forecast to continue rising, fully recouping its losses during the recession. In addition to new construction, the industry is also expected to benefit from an increase in renovation and retrofitting activity, particularly for energy efficiency projects and other green upgrades. For more information, visit IBISWorld’s Electricians in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is engaged in one or more of the following: performing electrical work at a site (e.g. installing wiring); servicing electrical equipment at a site; and the combined activity of selling and installing electrical equipment. The electrical work performed includes new work, additions, alterations, maintenance and repairs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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