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EPI Sees Minor Movement in October
Electrical Marketing - November 22, 2024
3Q 2024's Billion-Dollar Mega-Projects
Results from the 3Q 2020 distributor survey by investment firm Vertical Research Partners (VRP) touched on the current uncertainty about future economic conditions and revealed some pockets of strength.
Electrical Wholesaling worked with Vertical Research Partners to survey electrical and utility distributors, electrical manufacturers and independent manufacturers’ reps, and VRP’s research team of Brett Linzey, Jeffrey Sprague, Nick Lipinski and Andrew Shlosh produced the report. VRP said one of the more universal themes of their findings were supply chain issues and product availability. Some of the respondents’ comments on these topics included:
“Factories still recovering from COVID; deliveries very slow.”
“Load center and beaker availability is horrendous.”
“The supply chain is a game of whack-a-mole — from PVC to circuit breakers — all in a state of shortage depending on the day.”
“Lead times are improving but in the last few months product availability was probably as much of a drag on performance as other COVID-19 implications.”
“While some improvement was noted with customers expecting shorter lead times, there are still lingering kinks the supply chain is trying to iron out,” said VRP’s analysts. “In some areas like transportation it sounds like the supply chain was caught off guard by how quickly some areas improved. As for inventory levels, most of the contacts indicated that they were operating their branch networks with an adequate supply of inventory based on the demand outlook picture.
“Heavy industries such as oil and gas remain sluggish. Automotive and heavy-duty commercial vehicle markets continue to recover off lows. This was more of a production-related observation versus capital investment. It sounds like transmission and distribution utility work continues to be pretty solid with more projects staged for next quarter and even into 2021.
“Food and beverage was quoted as still strong by a handful of contacts. Nonresidential project activity that was halted during the depths of the pandemic resumed over the course of Q3 as work sites re-opened and access was restored. However, there are still select regions where some access is limited, particularly indoor.
“Financing for large projects is still available, but we had some contacts suggest new construction decisions are getting delayed until after the election. Growing budget gaps at the state and local level were also leading to some project push-outs and a few cancellations in certain regions. Once the ‘current crop’ of projects are completed respondents think it will take improving business confidence and a broader economic improvement for commercial related projects to pick back up. It is still a wait and see approach.”
All survey respondents get a free copy of the in-depth report, which includes insights into sales, pricing, inventory trends and an in-depth financial analysis of publicly held distributors and electrical manufacturers.
If you would like to participate in the next report, please contact Brett Linzey at [email protected].