Los Angeles, CA (PRWEB) September 18, 2012
The Electricians industry is one of the largest subcontracting sectors in the United States. In recent years, however, the slump in US construction set the industry back significantly. Firms generate a large portion of income from electrical system installations in new residential and nonresidential structures, as well as from repair, retrofit and maintenance work across the different construction markets. “As the general level of economic activity slowed during the recession, developers, homebuilders and business owners canceled or postponed construction projects that required electrical installation,” says IBISWorld industry analyst Andrea Alegria. As a result, demand for electrical contractors waned in the five years to 2012, with revenue expected to decline at an average annual rate of 5.3% to $109.8 billion. At the height of the recession in 2009, revenue plummeted 20.1%, the industry's steepest revenue decline over the five-year period. As recovery in the construction markets gains momentum, revenue is expected to increase 8.3% in 2012.
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 Alegria. “These firms resorted to shutting down branches and laying off employees in an effort to cut costs and preserve profit.” Other firms were acquired by larger companies, and some went out of business altogether. Over the five years to 2012, Electricians industry enterprises are anticipated to decline at an annualized rate of 1.3% to total 198,766 in 2012, while establishments and jobs are expected to contract at an average annual rate of 1.3% and 1.9%, respectively. The majority of industry operators are smaller firms that specialize in specific regions or industries. The industry's low level of concentration is expected to continue in the next 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.
In the five years to 2017, industry revenue is forecast to rise. During this period, the industry is set to grow on the back of improvements in the US real estate markets, as the residential, industrial, commercial and municipal building construction markets rebound from cyclical lows. In addition to new construction, the industry is also expected to benefit from an increase in renovation and retrofitting activity. For more information, visit IBISWorld’s Electricians in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments primarily engaged in one or more of the following: performing electrical work at the site (e.g. installing wiring); servicing electrical equipment at the 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
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