Higher nonresidential construction demand is spurring growth, despite fewer housing starts.
Los Angeles, California (PRWEB) August 22, 2013
The Electricians industry provides an essential service both for the construction of new buildings and for homeowners and businesses in need of electrical repair or installation work. Industry operators run electrical and telecommunications wire and cabling through the internal structure of buildings and may also be contracted for climate control, security system and fire safety installations. They also perform work for large-scale industrial projects (e.g. factories and energy infrastructure) and commercial or institutional buildings (e.g. office buildings and hospitals). “These lucrative contracts are pursued by the industry's largest companies,” says IBISWorld industry analyst Matthew MacFarland, “while the vast majority of contractors operate on a small, local basis and rely on the housing market for business.”
With demand dispersed among many downstream construction markets, Canada's recession in 2008 and 2009 led to sharp industry contraction. However, a quick turnaround in 2010 and more subdued progress since then have led Electricians industry revenue to grow at a slow annualized rate of 0.5% to $12.5 billion in the five years to 2013. IBISWorld expects revenue to rise 1.3% in 2013 in response to the cooling Canadian housing market. “The industry experienced a period of thin profit margins during the recession,” says MacFarland. Profit has since recovered, reaching prerecession levels, partly due to the exit of smaller, unprofitable enterprises in 2008 and 2009. As more contractors enter the industry during the coming five years and underbid established players to gain business, margins are forecast to record limited growth.
Canadian construction markets are projected to progress steadily during the next five years, and industry contractors will grow in kind. Industry revenue is projected to grow during the five years to 2018. An unstable housing market, a primary source of contracts for the industry's small operators, will preclude more robust growth. After overbuilding before the recession and a rapid rebound in 2010, single-family housing markets are overheated in many areas and will demonstrate volatile performance during the next five years, limiting industry growth in the process.
The Electricians industry has a very low level of concentration. The majority of industry operators are smaller firms that serve the single-family housing market in narrow geographic areas. The industry has comparatively low barriers to entry and benefits from demand from a variety of downstream markets. Typical electricians are needed on a case-by-case basis by homeowners and individual consumers, as well as by general contractors and homebuilders during construction.
For more information, visit IBISWorld’s Electricians in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld .
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189 .
IBISWorld industry Report Key Topics
This industry performs electrical work at the site (e.g. installing wiring), services electrical equipment at the site and also may perform the combined activity of selling and installing electrical equipment. The electrical work performed includes new work, additions, alterations, maintenance and repairs. Contractors that primarily work on distribution and power line projects are excluded from the industry.
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 and Canadian 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.