The industry will become less volatile as construction markets accelerate, raising demand.
New York, NY (PRWEB) February 02, 2014
The Electricians Industry, one of the largest subcontracting industries in the United States, has rebounded from its 2009 recessionary low that resulted from massive contractions across its downstream construction markets. Industry operators 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. With the general level of economic activity restrained between 2009 and 2011, developers, home builders and business owners canceled or postponed construction projects that required electrical installation. At the height of the recession in 2009, revenue plummeted, representing the industry's steepest revenue decline during the five-year period. However, industry revenue has picked up significantly since 2011 as construction markets have recovered. Given this strong recovery experienced by operators over the last two years, revenue is expected to increase strongly at an average annual rate in the five years to 2014.
As a result of fluctuating demand from downstream construction markets, industry enterprise, establishment and job numbers have been volatile during the past five years. Because economic pressures initially reduced the pool of available work for electricians, intensified competition forced companies to lower prices and many companies were unable to compete. Nonemploying companies without the luxury of reducing wages or closing branches struggled to stay in business. However, as construction markets stabilized in 2011 and began growing, small operators returned to the industry. Consequently, the number of industry enterprises is expected to rise at an average annual rate during the five years to 2014.
The Electricians Industry has a low level of concentration, as the top four largest firms account for a small proportion of total industry revenue. Construction markets grew strongly in 2012 and 2013 when the value of residential construction posted growth. In turn, industry revenue is expected to reflect downstream demand growth, with an increase in 2014. In the five years to 2019, according to IBISWorld Industry Analyst Omar Khedr, “industry revenue is expected to continue rising at an average annual rate, fully recouping its recessionary losses.” In addition to new construction, “the industry is also expected to benefit from an increase in renovation and retrofitting activity, particularly for green upgrades, such as energy efficiency projects,” says Khedr.