National Factbook 2017

Dec. 15, 2017
While you can expect solid but not-spectacular 2018 growth in the overall electrical market, some regions of the U.S. and niches within nonresidential should beat the national numbers.

While none of the leading economic indicators that typically offer a reliable signal a few months out on where the industry is headed are calling for a big growth year in 2018, from what they do show growth in the 3% to 5% range wouldn’t be a hard mark to hit. In the following pages, Electrical Wholesaling’s editors offer some insight into 12 national economic indicators that will give you a sense of where the industry is headed in 2018. They track the commercial segment of the nonresidential market; industrial market; and residential market, which account for the vast majority of sales through electrical distributors.

In addition, this year’s EW National Factbook offers some insight into four other key economic indicators — rail freight carloads, the Baker-Hughes rig count, and the prices of copper and oil. Electrical Wholesaling provides a monthly update on many of these indicators in its Electrostats department each month, and Electrical Marketing newsletter will be updating its subscribers on the national outlook each quarter in a new series of webinars.

Overall, these indicators point to a growth rate that correlates closely to the 5.1% growth that we published last month in Electrical Wholesaling’s annual Market Planning Guide. But how you feel about your 2018 business prospects will depend largely on your own unique market focus and where you are located, not the national growth rate. While some economic factors affect all markets like government tax policy and demographic trends like the retirement of Baby Boomers and the growth of the Millennial generation in the workforce, the electrical industry is really a mosaic of individual markets, each with its own distinct business profile.

To sketch out those profiles in your local markets, the Market Planning Guide offers its popular sales-per-employee multipliers to estimate local sales potential of the electrical contractor, MRO, OEM and factory automation customer niches, which account for more than 70% of all distributor sales. If you like EW’s sales-per-employee method of estimating sales potential and would like regular updates on the employee counts in the contractor and industrial markets for more than 300 Metropolitan Statistical Areas (MSAs), we now update that data and provide those sales estimates on a quarterly basis through Electrical Marketing newsletter and its website as part of a special $395 annual subscription offer.

The electrical market should have a decent but not great year in 2018, most likely logging an overall sales increase in the mid-single digits. There are pockets of double-digit growth to be had in the faster-growing regions of the Sunbelt like Florida’s Gulf Coast, the Carolinas, some parts of Texas and possibly Colorado’s Front Range. At press-time it’s difficult to say whether the proposed federal tax cuts or some sort of infrastructure bill would have any immediate impact in 2018.