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2016: A Look in the Contractor’s Crystal Ball

By Bridget McCrea

Wrapping up a year that found most electrical contractors managing a higher volume of business than usual, managers and owners discuss what’s ahead for 2016 and the role that electrical distributors will play in their success during the coming year.

Working on a fiscal year that runs from June to May, SECCO, Inc., of Camp Hill, Pa., hit a business lull in 2015 that lasted through much of the year. And while business was steady, the “highs” that contractors in other areas of the nation reported this year didn’t quite make their way to South Central Pennsylvania. “We wound up having a pretty flat year, sales-wise,” says Bruce Seilhammer, electrical construction group manager. “Our first quarter (which commenced on June 1) was a little lighter than what we experienced the previous year.”

Second quarter (Sept 1 – Nov 30) is looking the same, according to Seilhammer. “We’re keeping everyone busy, but business is still flat,” he explains. With 2016 around the corner, he’s optimistic about the coming year. “We’re seeing some projects coming out right now so we’re expecting a pickup over the next few months.”

Seilhammer says the electrical distributors he’s been working with – through the business ebbs and flows – have been willing to go the extra mile when it comes to offering competitive pricing and sourcing hard-to-find parts and products. “We’re working on a job right now where the owner requested a very specific item,” Seilhammer explains. “Our vendor stepped up and said, ‘Okay, we’ll find it.’ And sure enough, they did. It’s the small things that they do to help us out that really go a long way.”

Looking ahead, Seilhammer says his firm is looking forward to getting involved with an increasing number of larger, long-term projects. “We’ve kept busy handling quick, 1- to 2-month projects over the last few months,” says Seilhammer, “but we’re seeing some longer-term projects coming to the forefront for 2016. We’re hoping that’s the sign of a positive, continuous business trend.”

Stepping Up to the Plate
With both business volume and competition on the upswing in his market, Joe Martin, executive vice president at KenMor Electric in Houston, says electrical distributors like Consolidated Electrical Distributors (CED) could see even more business from his firm in 2016. “They’ve really stepped up a lot over the last few years to participate in some of our larger projects,” says Martin. For example, he says the distributor stores equipment in inventory when other supply houses may not be willing to take that step.

“We run into issues where equipment needs to be onsite on a certain date, and then the schedules change and we don’t need it there for another month,” says Martin. “Because CED has stepped up and helped us fill in those gaps during pretty tough situations, we’re giving them more of our business.” Martin expects that sentiment to continue into 2016, although he’s projecting a 10 percent decrease in KenMor Electric’s overall business volume for the coming year. He points to the recent decline in oil prices – and the subsequent layoffs and business shifts within that industry – as the primary drivers of the anticipated decline.

“People are telling us that it doesn’t really matter if oil prices are high or low, just as long as the prices are steady,” Martin explains. “If they do steady out, then business will take off again.” Even without a leveling off of oil prices, Martin says projects involving Exxon Mobil, plus an uptick of school and hospital construction, will likely keep electrical contractors busy in the New Year. “There’s a lot of activity right now in our area,” says Martin, “so we’re not expecting any big drops; just a slight decrease over last year.”

As he looks ahead to 2016, Dave Gilson, owner of Terabyte Technologies, Inc., in Aloha, Ore., sees positive growth in store both for his own firm and also for the various industries that it works in. Encouraged by the inroads that area electrical distributors are making in the technology arena – namely when it comes to integrating lighting and other electrical components – Gilson sees his firm getting even more involved in the installation of such systems.

“There’s a lot more integration going on, and a lot more technology-based systems being introduced on the market,” says Gilson. “When the distributor can handle the lighting control or other service that the customers are asking for – or, points me to someone who can deal with it – we’re able to handle the job more efficiently. We value that input and the relationships we’ve formed with our suppliers.”

Small Projects = Big Rewards
Smaller residential projects were a mainstay for Hampton, N.J.-based Maglio Electric, LLC, in 2015. The company, which has invested significant time and money in its online presence over the last year or so, is using tools like social media to help homeowners grasp the value of inspecting and upgrading older electrical components and systems. “We give them the self-assessment tools that they need to determine where they stand,” says Justine Maglio-Wardell, office manager, “and then invite them to call or email a licensed electrician for help.”

These efforts have produced a steady stream of business for Maglio Electric, which completed “a lot of electrical upgrades this year,” according to Maglio-Wardell. A typical project may find the electrical contractor upgrading a home’s system to accommodate the influx of devices, electronic components, and/or whole-home systems. “Once they realize that their existing systems aren’t robust enough to handle all of these new gadgets and devices,” says Maglio-Wardell, “they call on us for help.”

Maglio-Wardell sees this momentum continuing in 2016 but also anticipates Maglio Electric’s involvement in more commercial or office projects. She says electrical distributors will continue to play an integral role in all of the company’s projects. “We recently worked with a manufacturer’s rep and our supply house to bid on and complete a pretty large lighting project,” Maglio-Wardell recalls. “It was a great relationship among the three of us, with our supply house providing excellent customer service throughout the entire process.”

McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

 

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