Electrical contractors provide on-site installation, alteration, design, maintenance, and repair of electrical systems and equipment for commercial, institutional, and residential buildings. Key buyers include commercial building construction firms, home builders, and government agencies. Key suppliers include large-scale firms and local contractors.

Overview Electrical Maintenance Services

Electrical Maintenance Costs - 2024 

Wages - 32%
Profit - 6.2%
Purchases - 35%

Cost Breakdown USD                                   Wages 32%           Purchases 35%         Overhead 26.8%        Profit 6.2%           TOTAL (100%)

Market Pricing Per Hour

(Mar 23)                                                              $36.48                     $39.90                         $30.55                     $7.07                     $114.00

Price Trend 2021-2024 Annual CAGR                                                                                                                                                   5.7%

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Price Pressures / Environment  

  • Small Sized Suppliers - 90% of firms in the market are small-scale, independent contractors. Fortunately for buyers, low market share concentration and the resulting heightened competition among suppliers aid buyer power
  • Electrical Wiring - Suppliers rely heavily on electrical wire and thus face moderate supply chain risk due to frequent fluctuations in the price of copper
    • The US is a net importer of copper wire, meaning that electrical contractors generally purchase this essential input from foreign producers. The accessibility of imported copper wire drives down prices and ensures steady supply for electrical contractors
  • Labor Shortages - Ongoing labor shortages across hard services workforce puts pressure on suppliers and wages to maintain new talent in the industry

Outlook & Opportunities

  • Utilize PEP Suppliers - These suppliers have been vetted and can cover vast regions which allows for economies of scale and better pricing / service
  • Negotiate with Small Suppliers - Buyers can leverage the substantial competition among the many small vendors in this market to negotiate more favorable prices or contract terms
    • 98.3% of vendors in this market are small businesses with fewer than 100 employees
  • Multi Year Contracts - With inflation falling, but still higher than a typical year, consider securing a multi year contract with suppliers 
    • Built in Year 2 / Year 3 / Year 4 price increases are normal and can result in savings if inflation continues 
    • Typically 2% price increase / year is normal (increases may currently be higher with suppliers)

Source: Procurement IQ Procurement Research - 48688787  Electrical Contracting Services

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Electrical

Cost Drivers - Electrical Service

Suppliers / Pricing

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Ver 1.0 (May 24)

Confidential & Proprietary | 2024 CBRE Inc.

Overhead- 26.8%