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Contractor Employment Increases Point to Increased Sales Potential in Many MSAs

Oct. 7, 2016
Get the data: Market Momemtum - How Large MSAs with Major Electrical Contractor Sales Potential are Trending

The construction market continues to chug along at a reasonably strong pace in most markets, with the pace increasing during the summer months in many major metros.

According to the July 2016 electrical contractor employment from the U.S. Bureau of Labor Statistics, national electrical contractor employment is up 1.2% from June 2016 to 883,900 employees, and up 5.5% year-over-year from July 2015. BLS’ total construction data for individual Metropolitan Statistical Area (MSA) metros, now available through Aug. 2016, showed that outside of Miami and Houston, relatively few of the largest MSAs logged decreases in construction employment from May through August, and that almost all of the 50 largest MSAs showed year-over-year (YOY) increases. EM’s editors did find that the pace of employment growth when measured using three-month moving averages was higher in the YOY data (comparing June–Aug. 2016 to June–Aug. 2015) than the March–May 2016 and June–Aug. 2016 time periods. The average YOY employment growth for the 50 MSAs selected for the chart on page 2 was 6.2%, while the current three-month moving average was 5.4%.

The Boston and Sacramento MSAs stood out from the pack with double-digit employment increases over the latest three months and year-over-year. According to EM’s estimates, Boston added 1,564 more electrical contractor employees during the summer, while Sacramento added 693 employees. That’s a big increase when you use EM’s sales-per-employee method to forecast sales, as each electrical contractor employee represents $61,512 in annual sales potential. This means annual contractor potential increased by $96.2 million in Boston and by $46.2 million in Sacramento in the third quarter.