Electrical Wholesaling magazine’s annual ranking of the 200 largest electrical distributors in North America offers some good insight into the market trends having the most impact on your suppliers. In this article, we narrow that larger list down to show you the Top 50 (see Table below) and share two key trends that emerged from the survey data collected from companies on the listing.
Acquisitions Continue
The change in ownership for the four Top 200 distributors acquired so far in 2019 represents an estimated $800 million or more in revenues. With the acquisitions of Nu-Lite Electrical Wholesalers, New Orleans, La.; Sun Valley Electric Supply, Las Vegas; Becker Electric Supply, Dayton, Ohio; and North Coast Electric, Seattle, at least 28 Top 200 distributors have been acquired in the past five years. From 2017 to mid-year 2019, acquisitions accounted for at least $2 billion in total revenue.
A Solid Electrical Market in 2019
The Top 200 electrical distributors are optimistic about their business fortunes in 2019 and as a group expect sales to increase 6% or more. That’s right in the middle of the electrical wholesaling industry’s historical annual average growth range of 4% to 8%.
Approximately 30% of the respondents (38 distributors) are banking on double-digit growth in 2019, and 53% of respondents (68 distributors) expect 2019 growth in the 4% to 9% range. Supporting the double-digit growth forecasts in many cases were construction projects in some specific commercial or industrial niches — data centers, hospitals and liquid natural gas (LNG) plants, as well as projects in other areas of the oil & gas markets.
Quite a few distributors are working on New York’s Hudson Yards mega-project, as well as the many data centers that Google, Facebook, Apple, and other tech companies are now building. Several Top 200 distributors in Texas, Wyoming, North Dakota, Pennsylvania, and Ohio reported on the growth of the oil & gas market. Jeff Hocken, CEO, Crum Electric Supply Co., Casper, Wyo., says his company is seeing growth in oil & gas development/processing/transportation projects and doing some data center work. The company also helped supply the billion-dollar expansion of Salt Lake City Airport.
One niche within the oil & gas market mentioned by several respondents was cracker plants. Two distributors with branches in the Pittsburgh metro were supplying Shell’s $6 billion cracker plant north of Pittsburgh. And Kait Highland, executive assistant for Wholesale Electric Supply of Houston, says the company is also seeing a strong oil & gas market in Texas and that it’s generating sales from some multi-billion-dollar LNG and plastics facilities.
Jeremy Welsand, CFO, Border States Industries, Fargo, N.D., said the company is seeing double-digit growth in the oil & gas and OEM markets but a slowdown in the electric utility market. As far as big project business, Border States is also supplying some Google and Facebook data centers, as well as several medical and institutional facilities.
Van Meter Inc., Cedar Rapids, Iowa, enjoys a diverse mix of big project business, including data centers for Google, Apple, and Facebook, according to Karmen Wilhelm, vice president of marketing. Although capital spending from industrial accounts has decreased and the agriculture market has softened, the company sees enough business in other niches to support a 6.4% increase for 2019. “National contractor sales specific to data center construction remain steady,” she says. “Solar sales continue to grow in select markets with favorable renewable energy policy.”
Mike Pratt, CEO & president, American Electric Supply, Corona, Calif., says a diverse mix of construction projects will support some nice sales growth in 2019, and he expects a revenue boost of between 9% and 11%. “Commercial construction is showing very strong growth,” he said in his response.
“The tenant-improvement commercial and multi-tenant market have been strong through the first quarter. The green solutions market has been slow in the first quarter of 2019 but appears to be picking up due to recently added programs from the state and utilities.”
Pratt is also seeing some large construction work in the Los Angeles market. “We are starting to see the beginning of projects related to the 2028 Olympics coming to Los Angeles. This will be a major thrust over the next eight years,” he says. “Also, the continuing upgrade to LAX Airport, and the continuing boom in logistics facilities to support the Ports of Long Beach and Los Angeles.”
Visit www.ewweb.com to see a complete list of Electrical Wholesaling’s Top 200 Electrical Distributors.
