Electrical Market Sales Potential Increases +3.6% According to EM 2Q 2024 Data
U.S. electrical sales through electrical distributors increased +3.6% over the last quarter to $148.8 billion, according to EM's 2Q 2024 sales estimates. While that’s a smidge under the electrical market’s historical average growth range of +4% to +8%, it topped the year-over-year increase of +2.1%. It’s interesting to note that the Electrical Wholesaling/Vertical Research Partners quarterly survey (see article on page 1) registered an almost identical increase for 2Q 2024 of +3.4%.
The New York-Newark-Jersey City, NY-NJ-PA Metropolitan Statistical Area (MSA) enjoyed the biggest quarterly increase when measured by its $301.2 million increase (+5%) in total sales potential. Other market areas that showed solid quarterly growth included the Chicago-Naperville-Elgin (IL-IN-WI) MSA with $245 million in additional sales potential (+7%); the Minneapolis-St. Paul-Bloomington (MN-WI) MSA with a $186.5 million increase (+11.6%); the Boston-Cambridge-Nashua, MA-NH MSA with a $113.9 billion increase (+5.3%); and the Philadelphia-Camden-Wilmington(PA-NJ-DE-MD) MSA with a $103.3 million increase (+4.9%).
These five MSAs were all near the top of the list of metros with the largest quarterly increases in electrical contractor potential, too. In the industrial market, the Detroit-Warren-Dearborn, MI MSA showed the biggest increase in potential with a $9.4 million increase (+1.4%), followed by New York ($7.95 million); Dallas Fort Worth Arlington, TX ($7.6 million); and Chicago ($6.5 million).
It’s interesting to note that while quite a few metros had decent quarterly increases in sales potential, when you look at the chart below of the 50 largest metros in 2Q 2024 sales potential, you will see that some MSAs experienced some pretty significant year-over-year (YOY) losses, including the Denver, Aurora-Lakewood, CO MSA with a decline of $58.8 million; Minneapolis (-$57.2 million); San Francisco-Oakland-Hayward, CA MSA (-$47.5 million); and San Jose-Sunnyvale-Santa Clara, CA MSA (-$47.2 million). On the positive side of YOY ledger, Dallas-Fort Worth-Arlington, TX MSA (+$143.6 million); Miami (+$133 million); Houston-The Woodlands-Sugarland, TX MSA (+$122.7 million); and Baton Rouge, LA (+$105.2 million) all enjoyed YOY increases in sales potential of more than $100 million. Sales estimates use Electrical Wholesaling's sales-per-employee multipliers from the 2024 Market Planning Guide of $78,775 per electrical contractor employee and $2,650 per industrial employee. Employee counts and sales change data are derived from the Q2 2024 and Q2 2023 figures for construction and industrial employment published by the U.S. Bureau of Labor Statistics.
The June 2024 figure used in the three-month average was preliminary. Electrical contractor employment is estimated at 13% of construction employment, its historical average. Distributor sales to non-industrial and non-contractor business are estimated at 25% of the national total and are reflected in these sales estimates.
