This past year has been an exciting – and occasionally turbulent – time to be in the U.S. electrical construction industry. Government legislation and a greater emphasis on clean energy, electrification and sustainability have opened the door for massive project opportunities across the country. Furthermore, technology and innovation continue influence customers’ desire to increase productivity while reducing costs. At the same time, skilled labor shortages and supply chain challenges often created challenges for contractors to effectively deliver projects on schedule.
With 2023 behind us, what should electrical contractors and integrators expect in the new year? As the largest electrical distributor in the U.S., we’re expecting several economic tailwinds to provide numerous opportunities throughout 2024 and beyond.
Electrification and legislation
The continued push for electrification will be one of the most exciting trends in 2024. Fueled by the Infrastructure Investment and Jobs Act (IIJA), hundreds of billions of dollars are funding many complex, mission-critical projects at scale across the country. And perhaps the most encouraging part is that much of that funding hasn’t even been allocated.
Long term, the drive for electrification will mean that electrical contractors will have a pipeline of projects well beyond 2023. Increasing demand for electric vehicles (EVs), the infrastructure required to support them and a greater emphasis on sustainability will put additional strain on the grid, requiring equipment to be modernized and upgraded. Companies that understand how to lead such projects will be well-positioned to capitalize on these favorable trends.
Supply chain challenges have also underscored the need to bring manufacturing closer to home. This growing desire for on-shoring and near-shoring will not only create additional opportunities for contractors, it will also help create a more resilient supply chain.
Some challenges will remain
While the outlook for 2024 is bright, some lingering challenges from this past year will persist. Labor shortages – in particular a skilled labor shortage – will continue to be a challenge to deliver projects on time and on budget. And although supply chains are recalibrating to the new normal, certain products, such as transformers and electrical equipment, will continue to have elongated lead times as manufacturers work relentlessly to increase capacity.
And while they do pose a risk of slowing these tailwinds, there are several solutions that can help electrical contractors navigate through these challenges.
Solutions to operationalize growth
Wesco’s size and scale means we have the portfolio to help electrical contractors get the products they need to the right place at the right time. Whether that’s electrical products, safety, wire, cable, data communications components, materials or critical products, we have the reach and supplier community needed to support our customers’ requirements.
But that’s just one piece of the puzzle. We also have the solutions to help contractors meet their customer commitments and, when doing so, improving their overall profitability. When you consider that nearly a third of project time is spent on unproductive labor, our solutions can make a meaningful impact on a contractor’s bottom line through leveraging our portfolio of services, technologies and other innovations.
Our prefabricated, or pre-fab, solutions deliver multiple components in one shipment, enabling workers to spend less time sorting and transporting materials, and more time focusing on critical tasks. Click-and-install solutions deliver specialized equipment ready for installation, allowing managers to utilize specialized labor more effectively. And innovative products like Wesco’s INSTA-REEL can help contractors reduce labor costs, speed up installation, and minimize injury risk.
Beyond that, we also have the technical expertise to help contractors operationalize growth and execute projects more efficiently.
An evolving partner ecosystem
Ultimately, we’re also excited to see how the relationship between contractors and distributors will evolve. Capitalizing on opportunities in 2024 will require an ecosystem of the right strategic partners. It’s no longer simply about finding partners who can supply the products you need – although that is obviously important. It’s about identifying those that can help you stand out from the competition and expand your customer base.
Successful execution will depend on finding partners that can help you optimize labor and streamline project flow, and that have the financial strength to manage large projects.
If you’d like to know more about how Wesco can help you get more done in 2024, give us a call today.
Author: Sean R. Nacey, Senior Vice President and General Manager, U.S. Construction and Energy Solutions, Wesco
