Electrical Equipment Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,500 electrical equipment and parts distributors in the US consolidate products across many manufacturers to offer customers wide selections, reasonable prices, and a single point of contact. Major product categories include switchgear and switchboard apparatus; wiring and cable; lighting fixtures; industrial controls; conduit, raceway, and fittings; power and distribution transformers; and motors and generators.
Competition from Alternative Channels
Electrical products are available through a wide variety of channels, including manufacturers, retailers, energy service companies (ESCOs), product specialists, niche service distributors, and distributors of other trades.
Counterfeit Electrical Products
Counterfeit electrical products, often produced outside the US, have infiltrated the supply chain and are raising distributors’ liability risk.
Industry size & Structure
A typical electrical distributor operates out of a single location, employs about 26 workers, and generates about $17 million in annual revenue.
- The electrical distribution industry consists of about 7,500 companies which generate $132 billion annually and employ 195,000 workers.
- Most electrical distributors are small, independent operations - 56% of electrical distributors have a single location and 68% employ fewer than 10 workers.
- Customers include building contractors (29% of sales), other wholesalers and distributors (24%), industrial businesses (10%), retailers (8%), businesses for their own use (19%), and government (4%).
- Large companies include International Electric Supplies, Rexel (Gexpro), Sonepar USA, WESCO Distribution, Graybar Electric, and Consolidated Electrical Distributors.
Industry Forecast
Electrical Equipment Distributors Industry Growth
Recent Developments
Nov 25, 2024 - Construction Spending to Slow in 2025
- North American construction and engineering spending growth is expected to slow to 2% in 2025 after growing an estimated 5% in 2024, according to FMI’s fourth-quarter 2024 North American Engineering and Construction Outlook. Growth in nonresidential building construction will be led by public safety (up 6% in 2025), manufacturing (5%), amusement and recreation (4%), transportation (4%), and communication (4%). Commercial construction spending is expected to decline 8% in 2025 amid weaker demand for warehousing space. Lodging construction spending is forecast to drop 8%, and stubbornly high office vacancies will continue to weigh on new office construction, which is projected to rise 1% in 2025. Amid moderating interest rates, single-family construction spending is forecast to rise 5% in 2025. A recent jump in new apartment supply is expected to reduce multifamily spending by 16% in 2025. Power project construction is forecast to rise 6% in 2025. Amid investments in renewable energy, increased demand for data centers, and the electrification of buildings and transportation, grid operators expect annual load growth of 5% through 2028.
- Home builder confidence in the single-family market increased in November, marking the third consecutive month of sentiment improvement, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose three points to 46 in November 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said builders are generally upbeat about the election outcome, and future sales expectations improved in November. The HMI survey also showed that 31% of builders reduced home prices in November, and the average price reduction fell slightly to 5% from 6% in October.
- The number of building permits issued for single-family, privately-owned housing units increased 0.5% month-over-month but declined 1.8% year-over-year in October 2024. Single-family housing starts fell 6.9% month-over-month and decreased 0.5% year-over-year in October. Single-family housing completions dropped 1.4% month-over-month and fell 0.2% year-over-year in October. The decline in homebuilding activity was partly due to project disruptions from Hurricane Helene in late September and Milton in October, according to Reuters. High interest rates and a lack of affordability also continue to hinder the US housing market.
- The electricity-hungry artificial intelligence boom is spurring big tech firms to seek out new sources of clean energy to help meet the emissions-cutting pledges they made just a few years ago, according to The Wall Street Journal. The tech industry’s quest for clean energy comes amid an anticipated rise in electricity demand fueled by AI. A search on a generative AI platform uses ten times the electricity of a typical Google search. AI’s energy needs have created more cooperation between large tech firms and utilities. Google is partnering with a Nevada-based firm to buy geothermal power, and the search giant, along with Amazon and Microsoft, is working with Duke Energy on power produced by small nuclear reactors. Tech firms also hope to offset their increased emissions by entering deals with firms pursuing carbon capture technologies.
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