After recessionary declines, rising residential construction will boost demand for electricians
Los Angeles, CA (PRWEB) August 30, 2012
Firms in the Electrician Service Franchises industry operate within the larger Electricians industry (IBISWorld report 23821). Franchise establishments within the construction sector represent less than 1.0% of all establishments, owing to the vast majority of independent owner-operators, according to data from the US Census Bureau. Still, IBISWorld estimates that industry revenue totals about $549.0 million in 2012, which represents an annualized decrease of 6.8% during the five years to 2012. “Electricians, who provide services to residential, commercial and industrial projects, have suffered revenue declines during the recession and related slumps in building activity,” says IBISWorld industry analyst Josh McBee. “Likewise, electrician franchises incurred losses in the face of weak downstream demand.”
The adverse effects of the recession are evidenced in major player The Dwyer Group's Mr. Electric franchise, which is estimated to be the industry's largest franchisor. The company's US locations have declined at an annualized rate of 3.0% since 2008, according to data from Entrepreneur.com. Along the same line, the total number of operators in the Electrician Service Franchises industry is expected to fall at an annualized rate of 1.3% since 2007 and settle at an estimated 795 in 2012. Overall, there has been offsetting activity during the recessionary period. “Individuals sought electrician franchising as a new career path after losing a previous job or out of a need for supplemental income,” adds McBee, “but many of these aspiring franchisors have struggled to weather the unprecedented slumps in construction and remodeling demand.” A majority of the franchises that operate within this industry are smaller firms that cater to local or regional markets or specialize in a specific service. Nonetheless, the concentration level has grown slightly over the past five years because of considerable consolidation within the industry.
The coming years, however, are projected to bring brighter days for the industry. The residential housing market is beginning to show signs of improvement, especially in multifamily units. Through 2012, revenue is expected to increase 6.7% as the value of residential construction exhibits positive growth for the first time in years. Higher residential purchases generally increase private spending on home renovations and repairs as new owners seek to add value to their investment or customize structures to their preferences. Through 2017, revenue is forecast to increase. For more information, visit IBISWorld’s Electrician Service Franchises in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is composed of franchised businesses that provide electrical installation and repair services to residential and commercial customers. Industry establishments (franchisees) receive branding, marketing, administrative support, training and other services while paying franchise, royalty and renewal fees to the parent firm (franchisor).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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