Electrical Contractors NAICS 238210

Apr 10, 2025 - Contractors Prepare for Tariffs

• In a statement released in early April, the National Electrical Contractors Association (NECA) said that while the trade group appreciates President Trump’s efforts to strengthen US manufacturing, increase border security, and boost the economy, the administration’s tariff policies could have adverse effects for the electrical contracting industry. The industry relies on global supply chains, and tariffs could increase costs for key inputs and equipment, including copper wiring, transformers, other electrical products, and work vehicles. Supply chain disruptions could also make it more challenging to finish projects on time. To manage the shifting global trade environment, NECA suggested its members explore domestic supply sources, build on existing supplier relationships, and adjust contracts to account for cost volatility.
• The continued rise in the median age of US housing stocks may present opportunities for electrical contractors to perform upgrades and retrofits. In an April report, National Association of Home Builders analysis of US Census Bureau data showed that nearly half of owner-occupied homes were built before 1980. In 2023, the median age of owner-occupied homes reached 41 years, up from 31 years in 2005. Median home age has crept up since the Great Recession when new housing production dropped dramatically. Since then, home building activity has not kept pace with demand. US homes require more maintenance and repairs as they age, driving remodeling spending. The lock-in effect of low mortgage rates during the pandemic is also prompting homeowners to renovate rather than move and face a higher interest rate.

• The total value of construction put in place increased 0.7% in February compared to January, according to the US Census Bureau. Construction spending is a key demand driver for equipment rental and leasing. Spending on nonresidential projects rose 0.3% to a record $1.26 trillion. Residential spending grew 1.3%. Highway and street construction projects accounted for 40% of February’s nonresidential gains as public projects drove growth, according to Associated Builders and Contractors (ABC) analysis of US Census Bureau data. While public nonresidential spending was up 6.1% in February over the same month in 2024, private nonresidential spending has not kept pace, growing just 2.5% over the same period. In a press release, ABC’s Chief Economist Anirban Basu said, “The mix of high interest rates, tight lending standards, and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”
• US electricity generation capacity additions in 2025 are expected to be led by solar and battery storage projects, according to the US Energy Information Administration (EIA). The US is projected to add 63 gigawatts (GW) of generating capacity in 2025, led by utility-scale solar with 32.5 GW, followed by battery storage (18.2 GW), wind (7.7 GW), and natural gas (4.4 GW). Additions in Texas (11.6 GW) and California (2.9 GW) will account for nearly half of the solar capacity additions in 2025. Other states that are expected to have significant upticks in solar additions in 2025 include Arizona, Florida, Indiana, Michigan, and New York.