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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,700 electrical equipment manufacturing firms 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 77 workers and generates about $22 million annually.

    • The electrical equipment manufacturing industry consists of about 1,700 companies which employ about 134,300 workers and generate about $38 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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 5, 2022 - China’s Zero-COVID Policy Slows Factory Output, Exports
                                  • Electrical equipment manufacturers that rely on contract manufacturers and/or component suppliers in China may be experiencing increased supply chain disruptions. China’s manufacturing output decreased to a 26-month low in April as its zero-tolerance approach to the pandemic slowed factory output. The Caixin China General Manufacturing purchasing managers’ index (PMI) dropped from 48.4 in March 2022 to 46 in April. A reading below 50 suggests output is contracting rather than expanding. In April, new orders and production fell to their lowest levels since the survey began in 2004, and exports declined at the steepest rate in nearly two years. Delivery times grew at the second-fastest rate in the index’s history amid travel restrictions and raw materials shortages.
                                  • Production at US factories, a driver of demand for electrical equipment, expanded in April 2022, according to The Institute for Supply Management (ISM) However, the ISM’s monthly Purchasing Managers’ Index (PMI) fell 1.7 percentage points to 55.4% in April from the March reading of 57.1%, and the April reading was the lowest the PMI has been since July 2020. Any reading above 50% indicates expansion, while anything under 50% indicates contraction. The new orders index decreased 0.3 percentage points to 53.5%. The production index fell 0.9 percentage points to 53.6%. The backlog of orders dropped to 56% from 60%. The employment index fell to 50.9 in April from the March reading of 56.3%. Of the 18 manufacturing industries tracked by the ISM, 17 reported growth in April, including electrical equipment.
                                  • About 80% of chip makers say that it's become hard to find workers, many of whom have to be specially trained to handle the highly toxic compounds used in semiconductor manufacturing. The problem is worse in North America and Asia, where more companies report rising labor costs compared to those in Europe.
                                  • US shipments of electrical equipment increased 9.7% year over year in March 2022, on an unadjusted basis. Seasonally adjusted shipments increased 1.6% in March 2022 compared to the prior month.
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