Electrical contractors are job-driven. To survive, they must simultaneously quote jobs, win bids, finish off the jobs at hand and move to the next job sites.
But every once in a while, they must take a step back and look at the market drivers that mold the electrical construction industry so they can see trouble - or opportunities - down the road.
If work is drying up, electrical contractors need to know that as quickly as possible. On the flip side, if a flood of new work is coming into town, that's equally as important to know.
You have a better read on what's happening today in your market than any construction economist. But we can all use a little assistance in looking around the next bend. To help you get a sense of what may be in store next year for the electrical construction industry, this month's ElectroForecast 2001 on page 12 will give you a snapshot of what leading market forecasters in the construction business see for this industry. In Part 2, we will offer the insights of industry insiders from all areas of the electrical construction industry.
While forecasters expect the market to slow down some from the wild ride that we have been on for the last few years, overall growth in 2001 should remain sure and steady. That's because several key demographic trends, market demand for low-voltage wiring across virtually all market segments and some positive economic drivers are in place to keep most segments of the construction market humming right along.
Most economists predict that unemployment will remain low and inflation will stay in check in 2001. Although oil prices did spike this summer, they didn't dampen consumer spending, which is an economic driver that has an effect on many areas of the construction market.
It certainly affects new home purchases. With mortgage rates expected to remain low, you can expect housing construction to stay at a healthy, but lower level than over the past few years. Longer term, the housing market is bound to slide some, because of the demographic reality that as Baby Boomers age and move on through retirement age, not as many people will be in the prime homebuying years.
However, electrical contractors are in a great position to cash in on some of the new low-voltage electrical work in homes that seems poised to explode in the very near future. As the market softens for the installation of traditional power wiring products in the residential market, hopefully, electrical contractors will still be able to enjoy the additional dollars in cabling work for high-speed Web access, home networks, high-dollar entertainment systems and security systems.
Demographics also have a surprisingly direct effect on the amount of new construction and retrofit work in elementary schools, secondary schools and colleges and universities. Elementary school enrollment is just off its peak year in recent memory, and the amount of new construction and retrofit work elementary schools has been at near-record levels. As this population bulge moves to the high school and college years, you can expect the construction opportunities in this market segment to follow.
All in all, the editors of CEE News expect the electrical construction market in 2001 to keep our readers quite busy next year. Now, if you can just find enough good help to keep up with all of this new work...