Electrical Contractor Industry Statistics
The electrical industry has seen unusual and sometimes competing forces that can make it hard for you to get an overall sense of the market. For example, while there is an overall ongoing labor shortage, there was also lower demand for electrical services at the peak of the Covid-19 pandemic. This created both lowered work in some areas and higher demand for electrical services than in others. To be prepared for how the industry will continue to change and to step outside of your bubble and see overall trends that may end up impacting you, it’s wise to look at electrical contractor industry statistics. Here, we have gathered some of the most salient statistics and trends to help you see your industry better and adapt your business for success.
Basic Industry Statistics & Electrician Industry Trends
For starters, it is wise to get an overall sense of the basic demographics and demands on the electrical contractor industry.
According to the U.S. Bureau of Labor Statistics, in 2020, there were 729,000 people working as electricians in the United States. Demand and open positions grow by 9% annually, about as fast as other professions. The average electrical contractor makes $56,900 per year, which is roughly $27.36 per hour. As electric vehicles, smart home devices and more continue to drive up the use of electricity. It is expected to rise by 1.4% in 2022 alone, jobs for electricians are expected to remain very stable.
The overwhelming majority of electricians work in construction, which includes those providing electrical services to pre-existing homes. However, strong portions work in manufacturing, government and educational services as well. The only category of electricians which is expected to decline is those working directly on utilities. While those working in mining as well as oil and gas extraction are expected to grow the second fastest at 9.8%. This is just after construction electricians, which should grow 9.9%.
Continuing Labor Shortage for the Electrician Industry
Demand for new electricians and for electrical work is high and growing faster than new people are entering the profession. For at least a decade, industry experts predicted a labor shortage, and those conditions have now arrived.
In part, this is due to early retirement by Baby Boomers (which was somewhat accelerated due to the Covid-19 pandemic). According to Pew Research, half of older US adults have now retired, including 66.9% of those aged 65-74. This overall trend has impacted electricians.
Youth are also continuing to choose college over trade school and jobs in technology over jobs in construction. According to Construction Drive, 16.7% of highschoolers are interested in construction in general, never mind electrical work specifically. They are more likely to enroll in college than even the Millennials that came before them.
The Impacts of Covid-19 on the Industry
Electricians were not immune from the jobs losses that affected other industries in 2020 and throughout the Covid-19 pandemic. According to estimates from the U.S. Bureau of Labor Statistics, in the United States, 10,000 fewer electricians were working in 2020 than 2019. As electrical work in homes involves close contact and those struggling through the pandemic are less likely to spend on electrical improvements in their home, some demand for electrical services slowed. Some of the job growth over the coming years is expected to first make up for this job loss and high retirement numbers.
There is some optimism that younger people will begin to be more interested in the electrical industry as a whole. Generation Z (those who are currently teenagers) are now more likely to pursue career and technical educations, in part due to their experience during Covid-19.
The Price of Copper
Costs for electricians also rose during the Covid-19 pandemic. Most affected was copper. In 2021, costs of copper rose dramatically. According to Reuters, the price peaked in May at a record of $10,747 a ton. Throughout 2022, it is expected to average close to this all-time peak at about $9,000 per ton. Similarly, metals such as aluminum and nickel are also expected to remain high. This may directly impact the costs of buying materials for electrical work, or it may affect the manufacturing of the units and electronics that electricians install
However, according to the World Bank’s Commodities Market Outlook report, the price is already on its way back down, with a 3% drop in copper price during the third quarter of 2021. Supply increases from various global actors, including China releasing some of its stockpiles, are expected to further reduce the cost of copper from its extreme highs, which makes buying materials more affordable for electricians everywhere.
Of course, this is dependent on supply chain issues. The Covid-19 pandemic has caused issues in international shipping which may make copper wire and your other supplies and tools less reliably available than they would have been otherwise.
Consumer and Commercial Trends that Impact Electricians
When consumers have a growing interest in new electrical devices, it can drive new work for electricians and certainly means electricians need to be aware of how to install, repair and work with these devices. Some areas that, by and large, you can expect to see growth in include:
- Grow lights for consumer and commercial use
- Fast charging for electrical vehicles for personal and commercial use
- Smart home solutions
- Decorative lighting indoors and in landscaping
Of course, we cannot predict which specific trends will rise in your market, but you may already be seeing a trends towards one or more of these electrical needs as your clients recover from the Covid-19 pandemic. More granular analysis from local organizations and marketing firms may help you predict and prepare to meet new electrical needs in your client base.
As with other contractor industries, electricians are increasingly leaning on new technologies, and outsourcing some work based on technology, in order to maximize their profit and provide a better service. Particularly in an industry that struggles so much to find skilled work, the more non-skilled work you can take out of your electrician’s hands, the more time they can spend on the work only they can do. Options like professional electrician answering services can help.
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