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 88 workers and generates about $27 million annually.
- The electrical equipment manufacturing industry consists of about 1,600 companies which employ about 141,400 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
Mar 27, 2024 - Rising Wages Outstrip Price Increases
- Electrical equipment manufacturing industry producer prices were up moderately in Q4 2023 over the same period a year earlier, according to the Bureau of Labor Statistics (BLS). However, BLS data show that industry wages grew at nearly double the pace of pricing over the same period, perhaps signaling that firms’ margins are under increased pressure from rising labor costs. Industry employment increased slightly in Q4 compared to year-earlier levels, according to the BLS.
- 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 11% 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 11% in 2024, and water supply expenditures will grow by 8%.
- The boom in artificial intelligence (AI) - and the data centers needed to power it - are expected to drive a significant increase in electricity demand, according to The Wall Street Journal. Power industry experts suggest renewables won’t be able to come online fast enough to support the appetite for electricity created by the coming wave of data centers to support AI. That is likely going to require leaning more on fossil fuels, namely natural gas, which complicates tech and utility firm industry commitments to reducing their emissions. Electricity demand has grown slowly for years, but consulting firm Grid Strategies recently doubled its five-year electricity demand outlook from what it was projecting just last year. Hunger for electricity to power data centers is global. The International Energy Agency estimates worldwide electricity consumption from AI, data centers, and cryptocurrency could double by 2026.
- The total value of nonresidential building construction starts decreased a seasonally adjusted 16% in February from January, according to Dodge Construction Network. The drop was led by a 28% decrease in manufacturing projects. Commercial construction starts were off by 3% in February amid fewer warehouse starts, and institutional projects saw a 19% decline in starts amid weakness in the transportation and education buildings segments. Dodge Construction Network chief economist Richard Branch said, “Construction activity was hit hard by higher rates and more restrictive credit standards. Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays – especially in the manufacturing sector. While optimism should prevail in the second half of the year as the Federal Reserve begins to cut rates, some sectors like commercial, will make little headway over the remainder of the year.”
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