Most of the findings from the first annual CEE News state-of-the -industry survey won't surprise those who truly keep current with the electrical construction industry. Trouble is, how do you keep up with this fast-changing market?
Five hundred readers responded to the survey, which was mailed to 2000 CEE News and EC&M magazine readers, yielding a 25.4% response rate. Respondents did more than check off boxes; many took the time to weigh in with their opinions about industry trends.
One trend is clear: CEE News' electrical contractor readers are embracing change to better their businesses.
84.8% have done design/build and partnering work.
78.3% have done contracting of maintenance work.
64% have done voice/data work.
Overwhelmingly, CEE News contractor readers find involvement with these three disciplines positive: 91.4% positive for design/build, 91.4% for contracting of maintenance work, and 88.3% for voice/data cabling work.
Most (82%) expect voice/data cable work to increase in the next two to five years. Perhaps most significantly, half (51%) say voice/data profits are higher than traditional electrical/power work.
On the other hand, most CEE News contractor readers seem to be turned off by two other industry trends: utility deregulation and contractor consolidation. Fewer than 15% expect to partner with utilities. Of those readers who have partnered with utilities, only 29.1% believe that utility partnering will have a positive effect on their business.
Still, 38.7% of the respondents said that there are specific areas in traditional electrical contracting where partnering with an electrical utility would be a benefit. Specifically, many respondents wrote that partnering with utilities would help expand contractor business into high-voltage pole-line areas.
Meanwhile, of the few respondents (6.4%) that have been involved in contractor consolidation, only 14.8% found the experience positive while 13.8% found it negative; a surprising 56.2% said consolidation made no impact on their business.
All in all, the survey numbers tell a tale of CEE News contractor readers keeping pace by performing more telecom work, establishing design/build and partnering relationships, and buying the latest technological tools to best perform their jobs.
The double-threat electrician "Voice/data work isn't rocket science, but your customer treats it like it is-and your competition prices it like it is," responded one contractor. Another wrote "It's profitable, and allows us to one-stop shop, which customers love."
Of course, both design/build and voice/data work take commitment from contractors. To do voice/data, electricians need special training. Of those contractors who do voice/data work (68%), 70% train their electricians to do the work. For NECA members, the National Joint Apprenticeship Training Committee (NJATC) offers voice/data training for electricians, who then can double as "technicians."
For Lemberg Electric Co., a Milwaukee electrical contractor, the double-threat electrician is Lynn Carlson, voice/data technician. "We've become very involved in voice/data during the last couple of years," said David M. Washebek, vice president of Lemberg, which nets more than $15 million and employs 125 people. "Customers are asking for voice/data work."
Washebek finds power wiring comparable to voice/data. "It's all about knowing the parts and procedures," but he says that telecom finds better profits for Lemberg. Washebek expects to do more voice/data work during the next few years. "We do 50% commercial, 50% industrial. Industrial work is more challenging and offers more profit. Voice/data work for commercial and industrial sectors is growing at an equal rate. Industrial automation machines are all tied together now with voice/data cabling."
Reasons to believe Most readers (89%) reported they believe the rewards of design/build are worth the risks. "A team is built from the start that allows tradespeople to work better throughout the projects," wrote one respondent. Another wrote that it was the best value for owners because the concept generated "less friction among architects, general contractors, and subcontractors. The survey generated a long list of reasons why contractors like design/build. The most oft-repeated words were "better," "money," and "control."
The most popular reasons for performing design/build work include: better money, better money through the duration of a project, better project control, faster project completion, happier customers, and better designed systems.
Of course, not all respondents are happy with the design/build concept. Write-in reasons for dissatisfaction include: complete loss of control, ended up in litigation, general contractor took contractor ideas to another contractor, no one was in charge, and mechanical contractor kept changing design requirements.
"We've been doing design/build work for nine years and find it a positive experience," said Fred Lewis, vice president and general manager, W.B. Haynes Electric, Nashville, N.C., which holds the oldest active electrical-contracting license (number 3U, activated 1921) in North Carolina. Lewis maintains that the success of design/build depends entirely on relationships with customers.
Haynes, an open-shop firm, is comprised of four divisions: an overhead pole-line division, an electrical contracting division, a telecom wiring division, and a general contracting division. The telecom business started just after AT&T's deregulation in the early 1980s. The firm's electrical contracting end, which earns more than $11 million in commercial and industrial annually, often works with the telecom division. The electrical contractor will run lengths of fiber-optic and Cat 5 cable. The telecom division then finishes the installation and terminates the cable.
"It takes a different type of worker to do voice/data installation," said Jim Smith president of Jordan-Smith Electric, one of the largest electrical contractors in the Huntington, W.Va., area. "Teledata installers have to be into small tasks that need to be done neatly," said Smith, who is chairman of the NJATC for Local No. 317. Smith also believes it takes a different type of contractor to perform design/build work-more people oriented and more organized.
CEE News survey respondents showed the most enthusiasm for contracting maintenance work. Merely 2% of readers have found contracting maintenance a negative experience, while a whopping 92% found the experience positive. Reasons for contracting maintenance's popularity included "good profit margins," "low risk," "longtime customers," and "leads to other projects." Who could ask for anything more?