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The Year Ahead: What’s the Contractor’s Outlook?

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The Year Ahead: What’s the Contractor’s Outlook?

Electrical contractors reflect on how their businesses fared in 2018, how the labor market is impacting their businesses, and what’s in store for 2019.

 

Business was brisk last year for Maglio Electric, LLC, in Hampton, N.J., where 2018 was the year when customers needed extra help with specialized projects like pool bonding and grounding; fire alarm installations and upgrades; and helping to correct building violations.

These and other projects kept the electrical contractor on its toes for most of the year. “A few years ago, the alarm business pretty much died out for us, but it came back strong in 2018,” says Justine Maglio-Wardell, office manager. “Our state’s fire marshal, and the industry as a whole, have been paying closer attention to whether alarms are properly installed and monitored, and whether building owners have the proper paperwork for the alarms.”

Other customers called on the contractor to help with emergency exit signage, battery backups, and smoke tests. “Cumulatively, fire alarms made up a pretty big part of our project pipeline this year,” says Maglio-Wardell.

The pool bonding business was also good to Maglio Electric in 2018, a year when the contractor found itself helping customers bond and ground their swimming pools. “There were a number of electrocutions because of pools not being properly bonded and/or grounded,” says Maglio-Wardell, who saw that aspect of the company’s business pick up in February—right in the middle of the winter. “Just five years ago, we got three or four total pool bonding projects for the entire year. In 2018, our phones were blowing up with requests for help.”

Some of those requests came from customers located well outside of the contractor’s normal service area. “No one is doing pool bondings right now because they don’t want the liability,” says Maglio-Wardell. “We were traveling all over the place to do them; sometimes three hours driving each way.” Equipped with the special tools and expertise needed to do those types of jobs, Maglio Electric calibrates and certifies those tools on an annual basis. It also issues bonding certificates and any other documentation needed to pass inspections.

“There are a couple of ways to do this job, and use the more expensive equipment and method,” she points out. “It provides a more solid reading that’s readily accepted by inspectors. It’s also more thorough.”

The Rising Tide

It’s been said that a rising tide lifts all boats, and in 2018 that “tide” was definitely the national economy. At Lyons & Pinner Electric Companies in LaGrange, Ill., President Gary R. Misicka says his company benefitted from a strong market that, while competitive, presented some interesting new opportunities for the company.

But that doesn’t mean electrical contractors didn’t have to work hard to secure those opportunities and win new projects. “It’s a funny thing, because regardless of the amount of opportunities out there, and the shortage of manpower in many cases,” says Misicka, “it’s still very interesting how cutthroat our business can still be.”

In other words, when it comes to bidding on projects and negotiating pricing, the sheer amount of work available in the marketplace would logically create a more contractor-friendly atmosphere. “Maybe our competition will back off a bit and raise the bar,” Misicka would think to himself. That didn’t happen, nor are there any signs that it will in the coming year. “The last few years have been some of the busiest that I can remember, and I’ve been doing this for 28 years now. Yet the competition remains pretty stiff.”

Labor Market Challenges

As with most industries right now, finding and retaining skilled labor is a real problem for electrical contractors. And while Maglio-Wardell says not being able to find electricians has hampered her company’s ability to take on certain projects, Misicka says area training and apprenticeship programs are helping to ease the crunch.

“It hasn’t been horrible, but unemployment as a whole is very low here,” says Misicka. “Basically, if you’re a tradesperson here and you’re not working, it’s probably because you don’t want to work—not because there’s a lack of opportunity.”

Misicka says he’s heard from other electrical contractors who are facing more serious challenges on the labor front. “There are companies that have had to pass on good opportunities because they can’t man the jobs,” he points out. “No contractor wants to take on a job and then not be able to perform, but we’re fortunate in that we haven’t run into that issue.”

Turning Down Projects

Maglio-Wardell says finding help is a “huge, ongoing challenge” in New Jersey, where tradespeople are getting more and more difficult to find every year. “No one wants to work in the trades anymore,” she says. To offset the challenge, the electrical contractor has been working with area vocational schools, talking to other contractors about how they’re solving the issue, and revamping its website to appeal to millennial job candidates.

“We don’t have a shortage of work, but we definitely have a shortage of workers,” says Maglio-Wardell, whose father (company president Anthony Maglio, Jr.) has had to turn down opportunities to bid on projects due to the labor shortage. To make matters worse, the electricians that the company does employ are now being poached by Maglio Electric’s competitors.

“One, in particular, has poached two of our employees,” says Maglio-Wardell, who is working with a web designer who is adding an employment page to the firm’s website, with the idea of attracting workers who reside within a 30-minute radius of the company. Any more than that and commuting becomes an issue in a busy state like New Jersey.

Challenges aside, Maglio-Wardell is bullish on the future and looking forward to what 2019 brings for her family-owned electrical contracting firm. “Our bread-and-butter is maintenance work, but we’re also getting a lot of new opportunities, new accounts, and new customers in other areas,” she says. “We’re really just trying to keep ourselves out there and visible, and focused on doing what we do best.”

As he surveys the Chicago market and the number of projects that are either underway or in the planning stages, Misicka expects more of the same in 2019, noting that the number of “good opportunities” coming down the pike hasn’t shown any signs of slowing.

“That’s obviously a big indicator for us, especially with the winter months right around the corner here in Chicago,” says Misicka. “We’re seeing a lot of nice projects getting underway, which means that there’s funding and that people are investing in those projects. The year ahead should be a good one for our industry.”

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Bridget 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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