Electricalmarketing 100 Emfig 102006

Electrical Wholesalers’ Sales To Grow By $10 Billion In 2007, Up 10.5 Percent

Oct. 19, 2006
The sale of electrical products through electrical distributors will increase by nearly $10 billion next year, according to

The sale of electrical products through electrical distributors will increase by nearly $10 billion next year, according to the forecast from Electrical Wholesaling’s 2007 Market Planning Guide. The annual industry benchmark estimates U.S. sales for 2007 at $93.3 billion, a 10.5 percent increase from its 2006 estimate of $84.4 billion.

Appearing each year in the November issue of Electrical Wholesaling magazine, the Market Planning Guide (MPG) provides electrical-distributor sales forecasts at a national level as well as for nine regions and all 50 states. The MPG also provides industry multipliers to help electrical wholesalers estimate sales potentials for their companies by customer segment and product type.

The forecasts are based upon responses to the magazine’s annual Market Planning Guide survey, which is mailed each year to the more than 3,000 Electrical Wholesaling distributor subscribers with the title of chairman, president or vice president. The survey asks for the previous year’s final sales results, sales predictions for the
current year and predictions for the following year. It also asks respondents how sales for the first six months of the current year compared with the first six months of the previous year.

When comparing the first six months of 2005 with the first six months of 2006, 81.2 percent of respondents reported electrical-product sales increased, 7.3 percent said sales had decreased, and 11.5 percent reported flat sales. On average, U.S. electrical distributors saw sales surge 14.4 percent in the first six months of this year when compared with the first six months of 2005.

For the full-year 2006, predictions are tempered a bit to an expected 11.7 percent average increase over 2005. If electrical wholesalers’ 2006 and 2007 forecasts bear true, the industry will see four successive years of double-digit annual revenue growth. Of course, a big chunk of that “growth” will have come by way of commodity price increases.

Although more than 80 percent of respondents reported a sales increase for 2005 and the first half of 2006, and more than 80 percent predicted sales growth for the full-year 2006, only 63.9 percent of respondents expected their sales to increase next year.

The drop from more than 80 percent expecting a sales increase to just 63.9 percent may suggest that the average 10.5 percent predicted sales increase for 2007 may be on the high side.

Indeed, when making predictions for 2007, 9.4 percent of respondents expect sales to decrease, and 26.7 percent forecast that their 2007 sales will remain the same.

Electrical Wholesaling will offer a free live Web seminar, “2007 Electrical Market Forecast,” at Electrical Construction & Maintenance (EC&M) magazine’s E-Trade Show on Nov. 16 at 10 a.m. EST and 10 a.m. PST. You can register for the event, download the E-TradeShow and learn more about this new technology at http://ecmweb.com/etradeshow.

Watch, too, for the complete Market Planning Guide, which will be available for purchase in PDF format on Electrical Wholesaling’s Web site the first week of November. Visit www.ewweb.com.