What industries or sectors are spending the most on electrical contracting?
Electrical contracting involves installing and maintaining electrical power, lighting, and low voltage systems. The three major categories of this industry are new construction (50 percent), electrical system replacement in existing buildings or "retrofitting" (30 percent), and maintenance, repair, and replacement (MRR) work (20 percent).
According to IBIS World, the electrical contract industry was estimated to be $171 billion in 2017 with a growth rate of 4.1 percent between 2012 and 2017. In the U.S., the industry employs over 70,000 electrical contracting firms with over 650,000 electrical workers. The report also states that the industry is heavily dependent on downstream construction markets, especially the residential and commercial construction sectors. It is expected that there will be an increase in renovation and retrofitting activity, particularly for green upgrades, such as energy-efficiency projects. The robust expansion in these sectors is driving the growth of the electrical contract industry.
U.S. Energy Information Administration (EIA)published a report on the electricity consumption in the US. Out of the total retail sales of electricity of $2.8 million in 2016, the residential sector contributed $1.09 million (38.9 percent), the commercial sector contributed $1.03 million (36.78 percent) and the industrial sector contributed $738 thousand (26.35 percent). The residential sector consists of homes and apartments while the commercial sector includes offices, malls, schools, hospitals, etc. While space cooling (17.5 percent) is the main demand in the residential sector, refrigeration (13.8 percent) is the main demand in the commercial sector and machine drives (49 percent) is the main demand in the industrial sector.
According to a report by Global Construction Perspectives and Oxford Economics, the volume of construction is forecast to grow by 85 percent by 2030. Electrical contractors would be employed for new residential and nonresidential construction activity like operation, maintenance, and repair work (sometimes called "facilities services"). Larger companies have an advantage in getting contracts because of the increasing complexity of electrical projects and systems, and due to consolidation in the real estate management industry.
Business and enterprise customers of the electrical contract industry are increasingly interested in managing their energy use patterns. Manufacturers and industrial firms are monitoring heating and cooling equipment performance with intelligent sensors and commercial buildings are installing energy monitors to help gauge their consumption. Many well-known companies like Procter & Gamble and Walmart have announced energy efficiency targets for 2020.
In conclusion, the main sector spending on electrical contracting is the construction industry.