By Bridget McCrea
With the second half of 2016 underway, tED reached out to a few electrical contractors around the country to see how they fared during the first half of the year, what challenges and opportunities they were seeing in the market, and what their expectations are for the remainder of the year. In Part II of this article, we’ll find out what contractors think about the result of the recent NAED Reimagining Distributor and Manufacturer Relationships survey and look at what electrical distributors can be doing to better fulfill their customers’ needs for the remainder of the year and into 2017.
Emerging from the Winter Doldrums
The first six months are usually pretty manageable at Maglio Electric, LLC, in Hampton, N.J., and the first half of 2016 was pretty true to form, according to Justine Maglio-Wardell, office manager. “Winter is a slow time for us, so things are usually pretty quiet until spring hits,” she says. “I’m guessing that distributors in our area weren’t overly busy either, based on how quickly our project quotes were coming back.”
To offset the drop off in business, Maglio Electric typically plans ahead fiscally for the lean times, knowing that they won’t last forever. “We set aside dollars to cover our overhead, knowing that the money isn’t going to be coming in as quickly,” she says. The good news is that once spring came around, the phones started ringing off the hook at Maglio Electric, which is now handling a healthy volume of new electrical installs, routine maintenance on products like attic fans, and renovations/remodels of existing homes.
“We also get a lot of calls to do code corrections for people who are moving out of their homes, and who need an electrician to come in and do the work after the home inspection,” says Maglio-Wardell, who is pleased with the efforts that electrical supply houses/distributors have made in helping the company meet its customers’ needs. Recently, she says a customer needed a new bathroom exhaust fan to fit into an existing cutout that was off-center/askew.
“It was a wonky setup that we weren’t able to enlarge,” says Maglio-Wardell. “We had to work with what was there, and our supply house did a great job of hunting down a product that would fit into the cutout.” She says that during the “leaner” times the same companies are willing to work on their numbers in order to help the electrician win projects. “We still prefer to do business with the supply houses’ direct salesmen rather than online ordering,” she says, “because the customer service we get has just been phenomenal.”
Looking ahead to the rest of the year, Maglio-Wardell sees the current positive momentum continuing. To support that momentum, she says the company plans to keep on honing its own website and publishing educational blogs and other information for the public. “We’re trying to educate our own customers on how to be proactive by, say, having us come in to inspect their electrical systems before the home inspector gets involved,” says Maglio-Wardell. “We’re trying to really put consumer information out there that gives them something to think about.”
Hit or Miss?
Business is pretty brisk right now at Camp Hill, Pa.-based SECCO, Inc., where Bruce Seilhammer, electrical construction group manager, says he expects the steady flow to continue through the summer. And while the “rising tide floats all boats” saying tends to apply to the electrical contracting industry, Seilhammer says not all of his firm’s competitors are experiencing the same rush right now. “Some of us are just completely slammed while others are out there looking for work,” he says. “It’s kind of hit or miss.”
On a national level—based on his firm’s membership in and communication through the Independent Electrical Contractors (IEC)—Seilhammer says “most of the country is looking for help all over the place” right now. “We’re in the same boat. A lot of us are looking for additional manpower,” he points out. “That’s the toughest trend that we’re having to work through currently.”
Working through that labor challenge takes time. For up-and-coming electricians, for example, SECCO offers a 4-year-long apprenticeship program. And once those four years are over, there’s still more to learn about the complex electrical industry.
“Developing new electricians takes a substantial amount of time,” Seilhammer says, “and finding experienced professionals is getting more and more difficult.”
Labor challenges aside, Seilhammer has a positive outlook for the remainder of 2016. “I think we’re looking pretty strong at this point,” he says. “We have a couple of pretty large projects in the pipeline, so we’re going to be fine going into the end of the year. That will give us some cushion to keep filling that pipeline right into 2017.”
More Surveillance, Please
With research firm IHS projecting 7% growth in the world market for video surveillance equipment this year, companies like Terabyte Technologies, Inc., of Aloha, Ore., are fielding a high number of requests for such equipment right now. “I’m seeing a huge increase in video surveillance,” says Dave Gilson, owner. And while the demand for the equipment is clearly very high, he says the technology itself isn’t really keeping pace with customer requirements. For example, wireless video is offered in “line of sight” formats right now, and many end users don’t understand those details. “They know that they want wireless video, but they don’t get that it can become an extremely expensive solution,” Gilson says. “Once they see the price, they freak out.”
For now, Gilson says the only effective wireless solution is geared toward business use—like a multi-unit apartment complex. Unfortunately, such systems require blanket wireless solutions that can be pretty expensive to install and maintain (i.e., such as those used in hotels). “Hotels can just add a few dollars to the room fee to recover those costs,” says Gilson, “but there’s really no way to do that with a standalone video surveillance system.”
When asked what his electrical distributors are doing to help his company keep up with the demand for video surveillance equipment, Gilson says most are “falling behind.” “I have one distributor that I called 2-1/2 months ago to place an order,” he laments, “and I still haven’t received a call back. I had to go somewhere else.”
Gilson, who sees no business slowdown in sight for the remainder of 2016, is bullish on the outlook but apprehensive about his firm’s ability to meet demand. “At this point,” he says, “I’m wondering if we can even keep up.”
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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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