Most electrical work is driven by new residential and nonresidential construction activity. Operation, maintenance, and repair work (sometimes called “facilities services”) is less sensitive to real estate cycles. Larger companies have an advantage in getting contracts because of the increasing complexity of electrical projects and systems, and due to consolidation in the real estate management industry. Building managers typically prefer to deal with contractors who can provide service in multiple markets. Small companies can compete in local markets through service, word-of-mouth referrals, and relationships with general construction contractors. The industry is highly fragmented: 80% of electrical contracting firms have fewer than 10 employees.
Electrical Contractor Products, Operations & Technology:
Electrical contracting involves installing and maintaining electrical power systems, conduits, cables, control panels, generators, lighting systems, video and data systems, and low voltage systems (fire alarms). The three major categories of contracting work are new construction (50% of business); electrical systems replacement in existing buildings (“retrofitting,” 30%); and maintenance, repair, and replacement (MRR) work (20%). Electrical contractors often work as subcontractors on large projects.