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
May 28, 2024 - New FERC Rule to Streamline Transmission Line Permitting
- 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.
- Booming demand for artificial intelligence (AI) has unleashed a race to build enough data centers to support the nascent technology, according to The Wall Street Journal. However, building and outfitting the giant warehouses that shelter AI supercomputers is being slowed by land, power, and components shortages. Developers have been challenged to find available tracts of cheap property near enough to large amounts of electricity supply. The lead times for some key data center components, including cooling systems and backup generators, have grown up to five times longer than just a few years ago. According to real estate firm CBRE, US data center space increased by 26% in 2023. However, prices for available data center space are rising while vacancy rates are essentially nil, suggesting demand is far outstripping supply. Data center services firm Equinix notes it is challenging for the industry to scale up quickly due to extensive project planning and supply chain management complexities.
- US manufacturers continue to invest in automation to improve production efficiency and alleviate a worker shortage amid a tight labor market, according to a new preliminary report by the International Federation of Robotics. While the automotive sector leads manufacturing industries in industrial robot use, electrical and electronics manufacturers are also significant drivers of robot demand. In 2023, the electrical and electronics segment, robot installations increased 37% over 2022. Customers in the electrical and electronics sector account for about 12% of the total US industrial robot market.
- 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 strong electricity load growth in the coming years amid increased investments in manufacturing, data centers, and the electrification of transportation and buildings. Power project spending is forecast to rise 9% in 2024 over 2023 levels. Population growth and funding from the Infrastructure Investment and Jobs Act are boosting spending for sewage and water systems. Construction spending for sewage and waste disposal projects is expected to rise by 10% in 2024, and water supply expenditures will grow by 8%.
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