Electrical Equipment Manufacturers
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 1,600 electrical equipment manufacturers in the US produce goods that generate, control and distribute power. The industry manufactures a wide range from products including light fixture components; electric motors, generators, and components; power substation transformers; electrical panels and components for buildings; and electrical controls used in machinery.
Reliance on Construction Spending
Electrical equipment manufacturers’ sales are affected by the health of the construction sector.
Electric Grid Modernization
The need to modernize and expand electric grids is a positive for electrical equipment manufacturers.
Industry size & Structure
A typical electrical equipment manufacturer employs 90 workers and generates about $27 million annually.
- The electrical equipment manufacturing industry consists of about 1,600 companies which employ about 147,000 workers and generate about $44 billion annually.
- Most companies are small, independent operators - about 84% have a single location.
- The industry is concentrated: the 20 largest firms represent 53% of industry revenue.
- Customer industries include electric power generators and distributors, lighting equipment manufacturers, industrial machinery manufacturers, motor manufacturers and repair services, electrical component wholesalers and retailers, and electrical contractors.
- Large companies include General Electric, Honeywell, Schneider Electric, Emerson, and Eaton.
Industry Forecast
Electrical Equipment Manufacturers 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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