Electrical Contractor Employment
Bureau of Labor Statistics
With contractors often accounting for 50% or more of the average distributor’s business, any shift in employment trends can drastically affect sales through the channel. The national employment picture for these important customers is decent and shows gradual if unspectacular year-over-year increases during 2014. You can use this data to estimate market potential. According to EW’s 2015 Market Planning Guide, each employee at an electrical contractor accounts $49,253 in potential electrical sales ($71,119 for each electrician).
National Association of Home Builders (NAHB)
While the multi-family housing market has shown the most growth over the past few years, NAHB’s economists expect the momentum to shift to single-family housing in 2015 and 2016, with increases of 17.1% and 25.9%, respectively. That’s great news for the U.S. economy because new home buyers will load their houses and garages with consumer goods such as appliances, furniture, lawnmowers and other household goods and create new business for electricians, painters, plumbers, roofers, carpenters and other tradespeople.
Oil Rig Count
Baker Hughes Rotary Rig Count
(Land-based and offshore)
This chart illustrates the impressive growth of the oil & gas business over the last few years. Economists and other folks tracking this data will be looking very carefully at how many rigs are operating in 1Q 2015 because the drop in oil prices is starting to have its impact in this business segment. The latest data shows year-over-year (YOY) declines in two of the nation’s most active oil regions — a 24-rig decline in Texas’ Eagle Ford region to 206 rigs, and a six-rig decline in North Dakota’s Williston Basin to 181 rigs.
Anyone who really knows where copper pricing is headed in 2015 could probably make a ton of money. In 2014, prices for the copper zigged when many metals experts expected them to zag, and pricing continues to wallow below the $3-per-pound mark, even though the U.S. economy is in growth mode. Concerns over the state of the global economy in Europe and other key markets, as well as questionable output and consumption data from China, the world’s biggest consumer of copper, have thrown the market for the red metal into a tizzy.
Electrical Manufacturer Shipments
U.S. Department of Commerce
Shipments of products by U.S. electrical manufacturers offer a clear measure of the health of the industrial market. The news is good. While 2014’s year-to-date data shows a modest 2.1% increase through October, when you look at the numbers back to Jan. 2011, the data shows a 13% increase. And manufacturers appear to be bullish on 2015, according to NEMA’s monthly Electrical Business Conditions Index (EBCI), where 50% of respondents expect better business conditions over the next six months.
Architecture Billings Index
American Institute of Architects (AIA)
The Architecture Billings Index (ABI) provides one of the best indicators for future growth in the construction market because it measures business at architectural firms when projects are still on the drawing boards. AIA says this index reflects the approximate nine- to twelve-month lead time between architectural billings and construction spending. The latest ABI data shows that billings and inquiries are still healthy and above the 50-point line indicating growth conditions. AIA said billings for Nov. 2014 were at 50.9 points and pegged inquiries at 58.8 points.
Dodge Data & Analytics
Few other market segments are more important to the electrical market — or suffered worse during the recession — than office construction. New office construction has come back from the dead over the past few years and according to Dodge Data & Analytics will grow 18% in 2015 to $122 billion. The cities that will get the biggest chunks of these dollars will probably be the ones enjoying surges in employment in the digital and biotech sectors. Construction economists expect Austin, Boston, New York and San Francisco be among the big winners in 2015.