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
Jul 26, 2024 - Strong Power Infrastructure Spending
- Steady government investments in infrastructure, and building and transportation electrification are expected to drive robust growth in utility system construction spending in 2024, according to construction consultancy and investment banking firm FMI. Grids expect average annual load growth of 5% through 2028 amid increased investments in manufacturing, data centers, and the electrification of transportation and buildings. Power project spending is forecast to rise 8% in 2024 over 2023 levels. Investments in electric power infrastructure will increase another 8% in 2025 and 6% in 2026, 2027, and 2028.
- Demand for building design services improved in June over the prior month, but architectural billings remain soft, according to a July report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 46.4 in June from May’s reading of 42.4. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 51.6 in June compared to 52.1 in May, and the index for the value of new design contracts was unchanged at 45.6. The AIA’s Chief Economist, Kermit Baker said, "Architecture firms continue to face a period of headwinds in the construction sector, driven by elevated interest rates, high construction costs, and generally weak property values. This is the seventeenth consecutive month of a billings decrease and yet, despite the softness firms remain generally optimistic that conditions will start to improve once interest rates begin to ease.”
- US electricity demand declined 1.6% in 2023, partly due to mild weather, but electricity consumption is expected to rebound to 2.5% growth in 2024, according to a recent report by the International Energy Agency (IEA). US electricity consumption is projected to grow by an average of 1% annually in 2025 and 2026 amid continued electrification efforts and robust electricity demand from data centers. Between 2024 and 2026, data centers are expected to account for one-third of new US electricity demand.
- In May, amid rising demand for electricity, the Federal Energy Regulatory Commission (FERC) approved two new rules aimed at streamlining the process of building the large transmission lines that are needed to bring more power to the US grid, according to The Wall Street Journal. The first rule will require power producers and transmitters to apply a 20-year scope in their forecasts for electricity supply and demand shifts. The planning rule also urges utilities to implement grid-enhancement technologies, including power flow control devices and sensors, which can make transmission on existing lines more efficient. The second rule deals with permitting changes for new transmission lines to clear bottlenecks that have kept new renewable energy sources from hooking up to the grid. In 2023, the backlog of new power projects waiting to connect to the grid – mainly wind, solar, and battery storage – grew by 30% compared to 2022, according to Lawrence Berkeley National Laboratory. The new transmission line rule favors projects that benefit electricity consumers and adjusts cost allocation for projects spanning multiple states.
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