Industry revenue will trend higher, bolstered by improvements in construction activity.
New York, NY (PRWEB) November 28, 2014
Over the five years to 2014, revenue for the Electrical Equipment Wholesaling industry is anticipated to trend higher. Operators in the industry distribute electrical materials, such as wiring supplies, electric light fixtures, light bulbs, security systems and electrical power equipment for the generation, transmission and distribution of electric energy. Since a majority of these items are used in construction, industry revenue tends to ebb and flow with the overall health of the construction sector. “As construction activity surges higher, particularly residential construction, demand for electrical equipment is anticipated to follow suit,” according to IBISWorld Industry Analyst Brandon Ruiz. Additionally, eco-friendly initiatives geared toward reducing power consumption are expected to bolster demand for new energy-efficient electrical equipment. Consequently, IBISWorld expects the industry revenue to grow at an annualized rate of 4.6% to $16.5 billion over the five years to 2014, supported by an estimated 2.9% jump in 2014.
Due to relatively low barriers to entry, the Electrical Equipment Wholesaling industry is highly competitive. Moreover, price-based competition is high due to the fragmented nature of the industry. Although profit margins are expected to rise over the five-year period, bolstered by improving downstream demand from construction and manufacturing, growth prospects will likely be limited due to the price-competitive nature of the industry. “Moreover, fuel prices, a major running cost for distributors, are anticipated to rise significantly over the five years to 2014,” says Ruiz. This will also hamper profit growth as industry operators must absorb the costs to remain competitive.
Over the five years to 2019, revenue for the Electrical Equipment Wholesaling industry is forecast to continue to trend higher, bolstered by improvements in construction activity. Continued strength in residential construction, particularly in regards to housing starts, is expected to be the primary catalyst driving growth. Moreover, as manufacturers continue to automate their production processes, demand for industry products, such as industrial relays and controls, will likely increase. Despite these positive trends, several factors will continue to hamper profit growth, such as rising fuel prices and high price-based competition.
For more information, visit IBISWorld’s Electrical Equipment Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry distributes electrical construction materials, wiring supplies, electric light fixtures, light bulbs, security systems and electrical power equipment for the generation, transmission, distribution or control of electric energy (e.g. switchboards, circuit breakers, switches and fuses). This industry does not wholesale electronic components.
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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