(MENAFN- GlobeNewsWire - Nasdaq) Dublin, July 30, 2024 (GLOBE NEWSWIRE) -- The "U.S. Electrical Contractors market - industry Outlook & Forecast 2024-2029" report has been added to ResearchAndMarkets.com's offering.
The U.S. Electrical Contractors Market was valued at USD 237.59 billion in 2023, and is expected to reach USD 256.65 billion by 2029, rising at a CAGR of 1.29% The U.S. electrical contractors market is poised for substantial growth, driven by several key economic indicators. In 2023, South U.S. dominated the U.S. electrical contractors market, accounting for over 37% share by revenue. The U.S. population is largely tech-savvy and well aware of the benefits of modern technologies and smart services in terms of convenience and aesthetics.
The U.S. electrical contractors market is highly fragmented, with several vendors operating. Quanta Services, MYR Group, ArchKey Solutions, EMCOR Group, MasTec, and more have a sizeable local presence and major U.S. electrical contractors market vendors. The industry witnesses a sudden increase in electrical contractors. Several companies specialize in a limited number of services or cater only to one end-user segment. In addition, many vendors prefer skilled employees, mainly those with an electrical background. Thus, most employees need significant training, which further increases entry barriers.
Consequently, the adoption rate of contractor services is high. Various sectors, including residential and commercial construction and institutional projects, drive the demand for electrical contractors. The electrical contracting market stands to gain significantly from a strong economy, a robust labor market, and moderate inflation. With the expansion of construction activities across residential, commercial, and industrial sectors, electrical contractors are presented with ample opportunities for growth and innovation. By staying informed about market trends and harnessing technological advancements, contractors can effectively navigate potential challenges and position themselves for success in a dynamic business landscape.
In the U.S. electrical contractors industry, vendors differentiate themselves based on their range of service offerings, brand reputation, ability to customize solutions, pricing, skilled workforce, and technological capabilities. Many vendors provide comprehensive assistance portals and management services, collaborating with other entities in the electrical sector, such as those involved in transmission, distribution, substation, and Building Information Modeling (BIM) to offer a holistic corporate assistance program. Additionally, vendors frequently partner with technology companies to develop and enhance these assistance programs, ensuring they stay competitive and responsive to market demands.
MARKET TRENDS & OPPORTUNITIES
Demand From Data Centers
Electrical contractors play a crucial role in ensuring the reliability and efficiency of facilities, in addition to powering data centers. This includes designing and implementing backup power systems, such as generators and UPSs, to ensure that data centers can continue operating during a power outage. They also design and implement energy-efficient systems, such as power management systems, to reduce data centers' energy consumption. DC Blox has adopted 72 acres of land in Conyers, Georgia, to create a new hyperscale-ready data center campus. At full capacity, the campus is designed to accommodate 750,000 square feet of space and is supported by a total power commitment of 216 MW from Georgia Power.
Some electrical contractors expand their service portfolio by providing services to data centers. For instance, Cache Valley Electric is a known and leading critical data center electrical contractor. The company specializes in complex data center construction and maintenance to deliver electrical construction and communication solutions that help make online data secure and accessible. The U.S. electrical contractors market is critical to the data center industry. They provide the necessary expertise and skills to design and maintain electrical systems that power these facilities and ensure their reliability, efficiency, and security.
Demand for Electric Vehicle Charging Infrastructure
The dynamics of the U.S. automotive industry changed over the years. U.S. consumer preferences have changed from internal combustion engine (ICE) vehicles to electric vehicles (EVs) or green vehicles. This is primarily due to the rise in fuel cost, pollution, and overall decline in Electric Vehicles. For instance, the U.S. is the second-highest carbon emitter after China globally. In addition, federal and state governments implement various policies to control the harmful emissions from vehicles, driving the shift from ICE vehicles to EVs.
Furthermore, 15 states of the U.S. and the District of Colombia plan to convert 30% and 100% of commercial heavy-duty vehicles (HDVs) to zero-emission vehicles (ZEVs) by 2030 and 2050, respectively. During the first quarter of 2024, sales of EVs reached approximately 350,000 units, representing an increase of nearly 15% compared to the same period the previous year. Overall, in 2024, electric car sales in the U.S. are expected to increase by 20% compared to 2023, amounting to nearly half a million additional sales relative to 2023. However, despite a challenging end to 2023 for electric cars in the U.S., sales will remain strong in 2024. Electrical contractors are mainly licensed professionals to perform electrical work.
Therefore, electrical contractors usually hire professional electricians to install EV charging, apply for permits, and meet obligations mainly related to conducting electrical work, including safety requirements. Therefore, the rise in the demand for EV charging infrastructure is majorly driven by a combination of factors, mainly an increase in the number of EVs on the road, government incentives, environmental concerns, consumer convenience, and business opportunities.
Thus, the demand will continue to rise as more people adopt EVs as their primary mode of transportation. Also, electrical contractors are mainly licensed professionals to perform electrical work. Therefore, they usually hire professional electricians to install EV charging, apply for permits, and meet obligations mainly related to conducting electrical work, including safety requirements.
INDUSTRY RESTRAINTS
Intense Competition
The U.S. electrical contractors market is experiencing heightened competition due to various factors, making it challenging for companies to maintain and grow their market positions. The rapid pace of technological innovation is a significant driver of competition in the electrical contracting industry. The transition to renewable energy sources, such as solar and wind power, requires contractors to continuously update their skills and expertise. For example, companies like Tesla and Sunrun dominate the solar installation market due to their advanced technology and extensive experience, putting pressure on traditional electrical contractors to keep up or risk being left behind.
The industry faces a significant labor shortage, with a growing demand for skilled electricians outpacing the supply. According to the National Electrical Contractors Association (NECA), the shortage is driven by the retirement of experienced electricians and a lack of new entrants into the field. This shortage creates intense competition for skilled labor, forcing companies to offer higher wages and better benefits to attract and retain workers. Smaller firms often struggle to compete with larger companies like Quanta Services, which can afford to provide more attractive compensation packages.
Thus, electrical contractors are adopting various strategies to enhance their competitive position. Firms invest in advanced training programs to equip their workforce with the latest skills and certifications. For instance, Rosendin Electric offers extensive training and apprenticeship programs to ensure their employees are proficient in the latest technologies and installation techniques.
KEY QUESTIONS ANSWERED
How big is the U.S. electrical contractors market? What is the growth rate of the U.S. electrical contractors market? Who are the key players in the U.S. electrical contractors market? What are the significant trends in the U.S. electrical contractors industry? Which region dominates the U.S. electrical contractors market share?
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