Electrical contractors and industrial employment ended 2018 on a steady if somewhat unspectacular note, and they should drive some growth in electrical sales through the first half of 2019.
You will see some very familiar metros at the top of Electrical Marketing’s 4Q 2018 Electrical Contractor Sales Estimates. Seven Metropolitan Statistical Areas (MSAs) added more than 1,000 electrical contractor employees over the past year — a mark that translates to an estimated $66.3 million in electrical contractor sales potential according to our sales-per-employee multipliers. These MSAs were: Phoenix-Mesa-Scottsdale, AZ; Houston-The Woodlands-Sugar Land, Dallas-Fort Worth-Arlington, and Midland, TX; Seattle-Tacoma-Bellevue, WA; and Miami-Fort Lauderdale-West Palm Beach, and Orlando-Kissimmee-Sanford, FL. Two of these metros — Orlando (+10.3%) and Phoenix (+9.5%) — added electrical contractor employees at more than double the U.S. national year-over-year (YOY) rate of +3.8% through December.
While the early 2019 national construction employment data shows some signs of slowing, the Associated General Contractors (AGC) trade group attributes the decline to the severe winter weather in January and the lack of available construction workers, rather than to an economic slowdown.
It’s interesting to note that Houston, Dallas, Phoenix and Orlando were also on the Top 10 list for most single-family building permits in 2018, so you can figure residential construction was driving much of the growth in these markets. But commercial construction activity was a key driver in these markets, too. Dallas has all sorts of office and mixed-use projects underway in the suburbs, with activity in the Frisco, TX, area of particular note. Retail construction was also making a major impact in the Dallas-Ft. Worth area, and a report at www.dallasnews.com said the Dallas metro would have 3 million sq ft built in 2018 — “the equivalent of almost 30 small Walmart Supercenters.”
Miami has several large condo towers and mixed-use projects underway as part of its World Center project, which its backers say is the second largest urban project in the United States. According to a report at www.miamitodaynews.com, the $2 billion, 27-acre, 10-block project is expected to be nearly complete by 2021.
The Seattle metro has major airport, arrena and convention center jobs underway, and reportedly has more than 6,000 condos in the pipeline over the next few years.
In the industrial market, several Texas metros and Reno, NV, stood out in 4Q 2018. Houston was the only major market with both manufacturing and construction employment growing at more than double the national YOY rate. The Reno metro added 11,033 industrial jobs through 4Q 2018, a +5% increase, easily topping the national growth rate of +2.2%. The Midland (+20.8%) and Odessa (+11.1%) MSAs also enjoyed double-digit industrial employment increases, most likely due to the booming oil market in the Permian Basin.
It appears much of the industrial employment growth in the Reno MSA — which registered a flashy +31.7% increase in industrial employment with 6,133 new employees through 4Q 2018 — is tied to the Tesla Gigafactory. According to a Dec. 2018 report published by the Nevada Governor’s Office of Economic Development, the factory had 7,059 employees through June 30, 2018 and has created an additional 8,200 jobs in other local businesses and related industries.
Electrical Marketing subscribers can view or download the updated Electrical Contractor and Industrial Sales Potential data for all 50 states and more than 300 MSAs here.
