Outlook 2014: The Story Behind the Story

Nov. 25, 2013
Take a look at some key mega-trends driving customer demand for electrical products.

The Market Planning Guide is one of EW’s signature issues, and over the years it has helped countless executives analyze the sales potential the electrical market offers for their businesses.

When developing your market forecasts, EW’s editors believe it’s also important to factor in the macroeconomic trends that shape customer demand for the products you sell, and this year we have reported on many important trends that offer sales opportunities, such as the move toward more domestic energy sources like natural gas or oil and  the transformation of the lighting industry by LEDs. In our research for this issue, we have uncovered several more trends that could have a major impact on your business. Let’s take a look at them.

The economy seems to be recovering from the recession on a market-by-market basis. When you look at the large construction projects that broke ground in 2013 or are now on the drawing boards, it quickly becomes apparent that some regions of the country or  metropolitan statistical areas (MSAs) are recovering a heck of a lot faster from the recession than others.

For instance, Boston, New York, Washington, D.C. and its suburbs, Miami, New Orleans, North Dakota, Southern California, San Francisco and Seattle are all seeing plenty of $100 million-plus construction jobs and in many cases are enjoying increases in building permits year-over-year that dramatically outpace the national average.

This construction activity wasn’t just focused on downtown office towers, luxury condos and McMansions in the burbs. In many cases, these metros are enjoying these projects, as well as  a mix of other projects such as mass-transit and railroads, airports, ports and harbors, wind farms and utility-scale solar installations, hospitals and oil and gas development. On the flip side, some regions of the country, including the East South Central (Alabama, Kentucky and Mississippi) and parts of the East North Central (Illinois, Indiana and Michigan, Ohio and Wisconsin) aren’t seeing nearly as much construction activity.

Contractors and design firms from around the world want to do business in the United States. According to Roger Flanagan, a professor at the University of Reading in Great Britain and a speaker at McGraw-Hill’s recent 2014 Dodge Construction Outlook, construction companies from all over the world want to do business in the United States. He says they want to get their share of the action in the improving construction market and — believe it or not — say the U.S. construction market is much more stable and offers a better chance for prompt payment than many other markets around the globe.

Green design has become the norm for architectural firms. The increasingly green nature of the products you sell is driven in large part by the architectural and engineering firms a few steps up the supply chain. According to several speakers at the Dodge Construction Outlook, their customers now see the benefits of green construction, including an acceptable return on investment (ROI) and quality of life issues for workers or residents.

Daniel McQuade, chief executive of the construction services practice of Tishman and AECOM, said at the Outlook conference that green is no longer an initiative in the construction industry, it’s the way everybody does business, and the University of Reading’s Flanagan said building sustainability is nonnegotiable in the global design community.

Some additional factors contributing to the green  movement in this country are the increasing popularity of the U.S. Green Building Council’s LEED green building ratings and the new ANSI/ASHRAE/IESNA 90.1 building design standards that call for more efficient lamps, lighting controls compatible with other building control systems, and increased use of daylighting.

These key macrotrends won’t impact all product niches, types of companies or geographic regions in equal measure, but it’s always important to consider the macrotrends that may have the most impact on your business when developing your own annual forecast. 

About the Author

Jim Lucy | Editor-in-Chief of Electrical Wholesaling and Electrical Marketing

Jim Lucy has been wandering through the electrical market for more than 40 years, most of the time as an editor for Electrical Wholesaling and Electrical Marketing newsletter, and as a contributing writer for EC&M magazine During that time he and the editorial team for the publications have won numerous national awards for their coverage of the electrical business. He showed an early interest in electricity, when as a youth he had an idea for a hot dog cooker. Unfortunately, the first crude prototype malfunctioned and the arc nearly blew him out of his parents' basement.

Before becoming an editor for Electrical Wholesaling  and Electrical Marketing, he earned a BA degree in journalism and a MA in communications from Glassboro State College, Glassboro, NJ., which is formerly best known as the site of the 1967 summit meeting between President Lyndon Johnson and Russian Premier Aleksei Nikolayevich Kosygin, and now best known as the New Jersey state college that changed its name in 1992 to Rowan University because of a generous $100 million donation by N.J. zillionaire industrialist Henry Rowan. Jim is a Brooklyn-born Jersey Guy happily transplanted with his wife and three sons in the fertile plains of Kansas for the past 30 years. 

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