The 2004 Profile of

In journalism, it’s conventional to tell readers the who, what, where, how and why of a story and that’s , what we’ve done in interpreting the survey results from the 2004 PROFILE OF THE ELECTRICAL CONTRACTOR.

the ELECTRICAL
By John Fulmer

CONTRACTOR

ELECTRICAL CONTRACTOR has taken this mountain
of data and explained:

✱ ✱ ✱ ✱ ✱

WHO YOU ARE (size and revenue of company , and its race and gender breakdown) WHAT YOU DO (project type) WHERE YOU DO IT (new construction, retrofit or maintenance) HOW YOU DO YOUR WORK (working with specs, material purchasing and computer use) WHY YOU CHOOSE THE WORK YOU DO

A COMPREHENSIVE PICTURE

T

HE BIANNUAL PROFILE, a feature of this magazine for more than four decades, aims for a comprehensive picture of contracting from your perspective, providing an indication of where your business fits into the overall industry, while giving us a guide to the news and information that is important to you. The survey garnered 865 respondents, an increase of 152 from the last survey in 2002. It was the first time we employed the Internet, and the majority of responses (505) came through that source. Is that a coincidence? Probably not. Our survey reveals most of you have discovered the business benefits of computers. Since 2002, a slightly higher percentage of respondents used computers for word processing, Internet access (including buying supplies online), accounting, e-mail and other basic office functions. However, technology as a construction tool has grown by leaps and bounds:

Estimating-software use is up from 54 percent to 70 percent ® Job-cost control and analysis use grew by 20 percent ® CAD use doubled from 20 to 40 percent. Why? Because construction software’s ability to streamline and consolidate project management—from estimating to change orders—can give a competitive edge. And the constructionsoftware industry has responded to contractors’ needs by improving existing programs, delving into new areas, and designing “lite” or graduated versions of their products to fit contractors of all sizes. And here’s a programming note: We’ve designated “small” firms as those with up to nine employees; “mid-size” with 10 to 19; “large” with 20 to 99; and “very large” as those with 100 or more. Sixty-two percent of responses came from small firms while 10 percent came from mid-size, 15 percent from large and 11 percent from very large firms.
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2004 CONTRACTOR PROFILE

WHO ARE YOU?

S

EVENTY-ONE PERCENT of firms interviewed took in annual revenues of $1 million or less and just 10 percent made $10 million or more (See Figure 2). The majority of contractors have some college education (8 percent who responded had electrical engineering degrees) and their firms are diverse in race and gender, though in somewhat surprising ways. For instance, while 42 percent of firms polled employ women, they are woefully underrepresented in traditional job categories such as journeymen at 3 percent or apprentices at 4 percent. As you might expect, women make up a sizable portion of clerical workers, but the “executive” category, which includes owners, has the next-highest percentage of women employed at 13 percent. It’s doubtful all of them are owners and therefore probable many are hired into marketing, accounting and human resources. This is the first time our survey takes race and gender into account, so it’s hard to draw big-picture conclusions about the work force

in those two areas, except that Caucasians— at 87 percent—and males dominate. We can, however, parse the data to find 37 percent of firms have minorities in management or field positions, and those with women (in executive or field positions) or minorities are usually mid-size to very large contractors with $1 million plus annual revenue. Also, firms hiring minorities for management or field positions often hire females for nonclerical jobs, suggesting the firms are either more diverse or these employees may be minority females. Firms hiring minorities tend to be located in the West and South with Northeast firms lagging behind in minority personnel. Texas, with its large Hispanic population, charts as one the states with the most diverse electrical-contracting work force.

An educated work force

It’s pretty safe to compare education data for 2004 with those from 2002; the figures haven’t changed appreciably. Two years ago we reported 68 percent of survey respondents had some college, 18 percent had a BA degree and 14 percent an AA degree. Our 2004 FIGURE 1. Firm Size: Number of Employees survey shows: ® 60 percent of you 10–19 10% 100+ have had some college 20–99 1–9 11% ® 13 percent earned 15% 62% an AA degree ® 15 percent a BA degree. As noted earlier, 8 percent of contractors had an engineering degree, a figure that doubled since

2002 and which may point to a growing trend in integrating power distribution and low-voltage projects and the continued high popularity of design-build. (But more about that later, when we talk about what you do.) In general, firm size has little to do with higher education; the figures are more or less evenly distributed. The biggest gap is in BA degrees and occurs between very large firms where 24 percent of employees had a bachelor degree and small firms where 13 percent of employees earned one. To get a more personal perspective, we asked about hobbies, also a first-time question. About half the respondents engaged in four or more of the leisure-time activities listed, and we found the highest percentage, 59 percent of those surveyed, like to work around the house in their spare time. Yet another “why,” but one that’s pretty easy to answer. Contractors work hard and feel a sense of accomplishment in what they do for a living, in building and improving things. So it’s no surprise that “home improvement” tops the list and that a contractor’s work ethic and pride in a job well done is put to good use on days off. Contractors love to travel (51 percent) and enjoy the great outdoors: 39 percent chose hunting and fishing as the third-favorite hobby. Watching sports came in fourth, music and theater placed fifth and woodworking came in sixth, indicating there are some sofa spuds, culture vultures and closet carpenters in our ranks. The eternally frustrating game of golf notched in at seven, followed by classic/antique cars, playing sports, cooking and wine, and last, a group listed auto racing as their favorite pastime. A diverse and interesting bunch, indeed.

FIGURE 2.

Revenue

$25 million+ 4%

$2.5 million to $10 million 9% $1 million $10 million to $25 million to $2.5 million 10% 6%

Less than $250k 44% $250k to $1 million 27%

FIGURE 3.

Racial Composition of Firms
White or caucasian 87% Hispanic Other— 6% including Asian 3% Black or African-American 4%

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WHAT DO YOU DO?

T

H E S E D A Y S , contractors are involved in more types of projects, especially with the growth of hightech and security and life/safety systems. Our survey listed 17 project types and asked contractors which they performed in 2003 (See Figure 6). On average, 50 percent of

firms worked in eight of the 17 categories and very large, large and mid-size contractors were more apt than small ones to work in multiple categories. In fact, 84 percent of very large firms worked in eight or more categories, compared with 40 percent of small contractors. In all, more than 90 percent of the firms surveyed worked in four or more of the categories.

The old standbys
While emerging—and merging—technologies will be a huge part of the industry’s future, contractors know power distribution and lighting, which we subdivided into controls, fixtures, ballasts and lamps, is today’s bread and butter. These five “traditional” categories top their lists, and are performed by between 81 and 90 percent of firms surveyed while

Contractor age, employee diversity remain a problem
The average contractor age continues to be a cause for concern. For example, the 2004 survey shows:
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Most of you are middle-aged (48.6 years old on average)

You have spent an average of 24.6 years in the industry, most of your working life Only 8 percent were 25 to 34 years old, almost exactly the number (7 percent) of respondents 65 and older
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futurist with Social Technologies LLC and recent NECA convention speaker, thinks “inclusion,” looking at everyone as a possible employee, is vital. Hispanic and Asian workers are quickly becoming a large and influential part of the labor pool—old news to folks in California and the Southwest, but something novel in other parts of the country—and President Bush’s new immigration policies would allow 8 million undocumented immigrants to obtain renewable, three-year visas. In an e-mail, Dighe wrote that young people today are the most ethnically diverse in our history and if “any industry wants to attract talent in the future, they will have to figure out how to make their industry reflective of this more diverse population mix.” “Today’s youth,” he wrote, “will seek employment situations that have a diverse work force. Quite simply, today’s youth will seek employment situations that have a diverse set of people in it. “As your research indicates, many of the current contractors are entering their 50s and 60s and, unlike in the past when the next generation was ready to take the baton of ownership/leadership, many contractors are finding that the next generation is not interested,” Dighe added. “‘Inclusivity’ here could mean thinking about passing the business on to someone outside of the family. Contractors need to think carefully about identifying who’s next in the leadership pipeline and working with those people to develop their skills and abilities. Looking outside the family to longtime associates, key supervisors, and even in the current labor pool may be a potential solution.” AGE ■ 18–24 ■ 25–34 ■ 35–44 ■ 45–54 ■ 55–64 ■ 65+

These figures hew closely to those of the 2002 report, which also noted that contractors under 35 were notably absent.
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An inclusive work force Other factors may significantly affect the industry. The Aspen Institute, as reported in The New York Times, says enormous demographic changes are afoot for the next two decades. With declining birth rates, a leveling off of women entering the work force and baby-boomer retirements at hand, the Institute predicts:
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The labor force may grow as little as 16 percent

The percentage of native-born workers ages 25 to 54 won’t grow at all Workers with any college education might increase by only 4 percent.
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Contractors already know how difficult it is to find educated and qualified workers, and these projected changes could have a big impact on the available labor pool and productivity. Atul Dighe, a
FIGURE A.

Respondent Age

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Total

1–9

10–19 Company Size

20–99

100+

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2004 CONTRACTOR PROFILE
FIGURE 4.

Respondent Education

Total 1–9 10–19 20–99 100+ 0% 5% 10% 15% 20% 25% 30% 35%
■ Attended HS ■ HS Grad ■ Apprentice, Trade, Vocational ■ Attended College ■ AA Degree ■ BA Degree ■ MA Degree +

alternative-energy projects such as fuel cells at 3 percent and wind generation at 4 percent barely registered. We also discovered, regardless of company size, just about everyone worked in the four lighting categories. Rounding out the Top 10: ® datacomm systems at 62 percent ® backup power at 61 percent ® fire/life safety systems at 46 percent ® CCTV or access/motion security systems at 38 percent ® energy management/power quality at 34 percent.

Future work
We also wanted to know what type of work contractors expect to do, and which categories they think will change in volume over the next few years, regardless of what they do now. In general, contractors expect to increase or stay the same across
FIGURE 5.

all categories. Few expect a decrease in any category. If a contractor doesn’t work in a certain category, we found they’re unlikely to express an opinion about a future there. So we focused first on firms participating in a given area, then looked at those who hadn’t done that same type of work in 2003. Among those who worked in a particular category, large and very large firms usually predict increases in all categories, except ballast and lamps, where we find no differences by company size, and home automation/theater/security, where small firms expect greater future volume compared to mid-size, large and very large firms. On average, small firms that don’t work in backup power, datacomm and fiber optics pick those as growth areas more frequently compared to all others firms not working in these areas. In contrast, 16 percent of very

large firms predicted growth in fuel cells and 17 percent predicted an increase in wind generation projects compared with all other firms. Overall, alternative-energy projects, including solar at 10 percent, wireless networks (11 percent), home automation/theater/security and energy management (both at 9 percent) were anticipated to be high-growth areas for firms yet to tap into those sectors.

On the leading edge
We also compiled a list of seven “leadingedge” projects ranging from configuring a CISCO router (7 percent of firms) to communications/data systems moves, adds and changes at 34 percent, a type of work done frequently by contractors of all sizes; however, these percentages are even higher for large and very large firms. Overall, 51 percent said their firm performed this kind of work in 2003 compared to 37 percent two years ago.

Volume will increase among those working and not already working in category
Power (60-HZ) Lighting Controls Lighting Fixtures Ballasts Lamps Backup Power

Energy Management/Power Quality Biometrics (CII) Fire/Life Safety Systems (CII) Security Systems (CCTV/Access/Motion) (CII) Home Automation/Security/Theaters (Res) Communications/Data Systems Fiber Optics (Datacomm and Lighting) Wireless Networks Fuel Cells Solar/Photovoltaics Wind Generation

■ Currently working in category ■ Currently not working in category

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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Regardless of whether their firm performed this type of leading-edge work in 2003, respondents were asked to predict their future volume in each area over the next few years. Almost all expect to “stay the same,” few predict a decrease, and firms not working in a given area usually didn’t guess about a future there. However, we discovered mid-size and large firms are most likely to predict increases in all categories. For those not yet performing work

in these areas, 3 percent of very large firms predicted a rise in low-voltage systems-integrator work, and 10 percent predicted a rise in datacomm work for a CLEC. The “whys” for all of these predictions are hard to discern, but surely, some contractors for any number of reasons—security in what’s known, how local markets shape up, etc.—stick with their bread and butter and probably will say the same when we conduct our next survey. We’re sure they

do what they do well, have a good business reputation and a streamlined operation that keeps the contracts coming, and see no need to expand their business into more arcane or risky projects. That’s not to say fruitful opportunities don’t exist for the more adventurous contractor or one whose market is rife with low-voltage or alternative-energy work. As our survey shows, those jobs and the number of contractors performing them may rise in the future.

A simple formula for success: E=PC2
As we said, 84 percent of very large firms worked in eight or more categories compared with 40 percent of small contractors. In all, more than 90 percent of the firms surveyed worked in four or more of the categories. This points to an ever-developing “integration” trend, one that’s seen strong growth for the last decade and has affected commercial/industrial/institutional projects and single-family residential contractors alike. Dr. Tom Glavinich, a regular contributor to ELECTRICAL CONTRACTOR, has devised the formula E=PC2 to explain this simply. That translates into E for markets, P for traditional power projects, and C stands for control and communications work. The contractor that puts P and C together will have plenty of Gs. And that stands for greenbacks. The ability of a contractor to group traditional power installations with various combinations of security, lighting controls, fire alarm systems, automated building systems, datacomm and even biometrics is a powerful sales tool, providing a one-stop shop where an owner can get 120V power, Category 5 cabling, HVAC that’s computer-controlled for optimum efficiency, an energy-saving lighting system that dims at peak sunlight and “spotlights” an after-hours intruder with the help of the integrated security system, and amenities such as state-of-the-art home theater and sophisticated sound systems. Figure B shows 95 percent of our respondents did some type of traditional power or lighting project and 65 percent did a power-quality project, which includes backup power and energy management. We also found some interesting figures on what we call “core integration projects”: ® almost two-thirds of our contractors did some type of automation/control systems project for commercial/industrial/ institutional (CII) or residential markets ® 55 percent of respondents did a CII automation/controls system project ® almost one-third did a residential automation/security/ theater project ® 66 percent did a communications low-voltage project ® and 10 percent of all contractors did a alternative energy project with 20 percent of very large firms involved in this sector. Home-theater work is an especially lucrative niche market, and many, if not most, new homes are being wired for more than 120V power these days. Residential contractors who can’t do more complex wiring tasks could be left in the dust.

FIGURE B.

Contractors work in many areas in addition to traditional power

Any Traditional Power/Lights Any Power Quality Any CII or Res Automation/Controls Any CII Automation/Controls Systems Residential: Home Automation/Security Any Communication/Low Voltage Any Alternative Energy

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

■ Total ■ 1–9 employees ▲ 10–19 employees ★ 20–99 employees ● 100+ employees

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FIGURE 6.

Currently Work in Category
Power (60-HZ) Lighting Controls Lighting Fixtures Ballasts Lamps Backup Power

Energy Management/Power Quality Biometrics (CII) Fire/Life Safety Systems (CII) Security Systems (CCTV/Access/Motion) (CII) Home Automation/Security/Theaters (Res) Communications/Data Systems Fiber Optics (Datacomm and Lighting) Wireless Networks Fuel Cells Solar/Photovoltaics Wind Generation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WHERE YOU DO ■ MA Degree YOUR WORK + ■ BA Degree

for small firms, while the percentages for (See Figure 7). In what could be seen a disturbing trend, the portion of new construction has dipped 9 percent from our 2000 survey when we proclaimed it “was a good year to be an electrical contractor.” It’s still good. Many think voice/data/

video will make a strong comeback and When baby boomers latch on to their parents’ inheritance—a sum estimated in the low trillions—some experts think a good chunk of that will be spent on real estate, especially if empty nesters leave the suburbs for the cities to take advantage of

O
60% 50% 40% 30% 20% 10% 0%

■ AA Degree ■ Attended College ■ Apprentice, Trade, Vocational willHS Grad wave of the future. new construction rises as firms grow larger renovation ■ be the ■ Attended

U R C O N T R A C T O R S report they get 41 percent of revenue from new construction, 31 percent from modernization/retrofit and 28 percent from maintenance/service/repair. However, maintenance is a high-revenue generator
FIGURE 7.

Types of work by sector

Total

1–9 employees
■ New construction

10–19 employees

20–99 employees

100+ employees

■ Modernization/retrofit ■ Maintenance/Service/Repair

FIGURE 8.

Types of electrical projects by firm size

80% 70% 60% 50% 40% 30% 20% 10% 0%

Total
■ Electrical power/distribution

1–9 employees

10–19 employees

20–99 employees

100+ employees

■ Communications/data systems ■ Security/Life Safety Systems ■ Total building automation ■ Sound and video

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2004 CONTRACTOR PROFILE

their culture, nightlife and restaurants. If this prognostication proves true, renovation work should turn up aplenty. In general, our 2004 survey showed: ® regardless of company size, electrical/power distribution is by far the largest revenue source, accounting for an average of 69 percent of sales ® total building automation registered at 11 percent and accounts for more revenue of mid-size firms than firms of any other size ® communications/data systems (low voltage) at 10 percent, is less important to small firms ® similarly, security and life safety work, only 6 percent of total sales, grows in importance as the company size grows; it accounts for 4 percent of small-firm revenue and 9 percent of very large-firm sales ® sound and video accounts for 4 percent of revenue on average with no significant difference by company size. But there are no huge gaps anywhere; the biggest difference is only 9 percent in power distribution sales, with small firms
FIGURE 9.

at 71 percent and mid-size firms at 62 percent (See Figure 8).

HOW YOU DO YOUR WORK

Residential vs. commercial
Across the total sample, contractors get 34 percent of their work from single-family residential, 8 percent from residential multifamily, and 52 percent for business from commercial, industrial, institutional and public places (CII). Airports, highways, power lines and other “nonbuilding” projects account for a mere 4 percent of the business. The biggest difference in work performed comes when comparing company size. Small firms report 46 percent of their work comes from single-family residential, while very large firms say it’s a miniscule 5 percent of their business. CII projects, however, account for 79 percent of the work for very large firms and 41 percent for small firms. Very large firms also do four times as much “nonbuilding” work as small firms. No big shock here. Big firms take on big nonbuilding projects and residential construction has always been a mainstay of small firms.

C

O N T R A C T O R S S AY 46 percent of their revenue comes from design/build, which allows contractors total or near-total control of their job. It’s particularly important to small firms, which claim it makes up 53 percent of their work. (Mid-size, large and very large firms all claim it’s 35 percent.) We designated three more categories related to engineering and design: ® work in which the contractor made substantive changes to specs and drawings ® work in which slight changes were made ® work in which someone else’s specs and drawings were followed. Contractors said they made substantive changes in 13 percent of their jobs, and also made slight changes in 13 percent of their work, but in a hefty 28 percent of their work, they followed specs and drawings to the letter. An even closer look shows small firms

Building categories

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Total
■ Residential (single family)

1–9 employees

10–19 employees

20–99 employees

100+ employees

■ Residential (multifamily) ■ Commercial/industrial/institutional ■ Non-building (e.g., airports/highways/power lines)

FIGURE 10.

Extent of contractor’s changes to specs and drawings

60% 50% 40% 30% 20% 10% 0% Total
■ Design/build

1–9 employees

10–19 employees

20–99 employees

100+ employees

■ Made substantive changes ■ Made slight changes ■ Followed other’s specs and drawings

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use design/build on 53 percent of their projects; couple that percentage with the small firms’ propensity to do single-family residential (remember, it took up 46 percent of their work) and it’s a good guess deign/build is being used in a lot of home construction. Small firms say they followed specifications faithfully only 23 percent of the time, a percentage that’s at least 12 percent lower than that of the bigger firms. Also, mid-size, large and very large firms score much higher percentages than small firms when asked if they followed specs and drawings faithfully. Another “why?” An educated guess is that public-sector projects, normally off-limits to design-build, are done less often by small firms.

How contractors purchase
Respondents were given four specifications options for installation and asked how their company had to fulfill obligations on the job. We found: ® a single brand is specified 21 percent of the time ® multiple brands are used at 28 percent ® “or equal to” products can be used at a 37 percent rate ® performance-specified brands are required 15 percent of the time. Note that a single-brand specification is a requirement for small firms 25 percent of the time, a rate that falls incrementally as companies get larger, dropping to 13

percent for very large firms. It’s no revelation that distributors get the lion’s share—74 percent—of the market, with warehouse home centers lagging far behind at 14 percent. As companies get bigger, home centers play a smaller role: very large firms buy only 5 percent of their supplies from that source. Almost all contractors surveyed buy from multiple sources, the number of which climbs with firm size. For example, 11 percent of small firms and 32 percent of very large firms buy from all four sources; however, a majority of small firms—54 percent—say they buy from just two sources, perhaps because larger companies are both located in more places and involved in more different types of work. Online purchasing is still a small factor—just 6 percent of all firms buy over the Internet—but very large firms do 9 percent of their purchasing online.

Computer use
Computer use is no longer the way it will be done; it’s the way it is done. Forty percent of large and 74 percent of very large firms use computers in eight ways or more compared to 15 percent of small firms and 10 percent of mid-size firms. This pattern—more use by small than mid-size—suggests a concentration of small firms that specialize and need the tools to compete in selected areas. The fact that almost all very large firms said

they used computers for four or more tasks hints at the opposite, that they are involved in many different sectors. As noted earlier, Internet access/e-mail is used almost universally—in fact, all large and very large firms say they use it. Also: ® 97 percent of large and very large companies use computerized accounting ® a whopping 94 percent of very large firms use computers for estimating and job-cost analysis ® and 88 percent say they run AutoCAD. This part of the survey yields some puzzling and interesting data. There are some unexpected results in computer-program use that on the surface don’t seem to be cost-effective for small firms. For example, 34 percent of small firms—that’s just one to nine employees, remember—say they have computerized equipment and tool inventory, and 9 percent say they use computers for fleet management. Now that could be something as simple as a customized Excel spreadsheet or it could be specialized software. In any case, contractors have put their computers to good use. This data is probably skewed toward normal office use of computers, but PDAs and laptops have been common tools in the field for some time. Reported use for field laptops is 42 percent and 33 percent for PDAs, and we found 23 percent of firms order material with handheld devices. In the future, large and very large firms expect increased computer use from these already high levels.

You as key specifier in supply procurement
Our 2004 survey found contractors choose the brand 72 percent of the time. Small firms choose more often (74 percent) than very large firms at 65 percent. In the latter case, we hypothesize the projects may be far larger and more complex, and purchasing may be controlled by the general contractor—or that small firms are involved more in single-family residential design-build and have more purchasing control. Guesswork aside, we think the electric contractor’s capacity to make product choices is terribly important—in terms of costs savings and getting the job done on time with a minimum of change orders. When it comes to purchasing electrical material and supplies, they know what’s best. Unless there are overriding reasons, why should someone else choose for them? In his report to the Electri’21 Council, “Procurement Chain Management in the Construction Industry,” Perry Daneshgari, a consultant and contributor to this magazine, said general contractors contend it saves money, provides faster occupancy and wider product selection when they control procurement. Daneshgari disagrees somewhat. While his study admits the general contractor procurement method (GCPM) adds value through bulk purchases and by cutting out the distributor or subcontractor (and their markup), and allows procurement earlier in the project, this method may cause lost time later in the job due to lack of expertise. Daneshgari says the specialty contractor procurement method (SCPM) provides the owner value through service and knowledge. These are some of his crucial points when it comes to SCPM vs. GCPM: A subcontractor’s product knowledge and installation skill is vital to most owners
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FIGURE 11.

Specification options

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Total

1–9 employees
■ Single brand

10–19 employees

20–99 employees

100+ employees

■ Multiple brand ■ “Or equal to” ■ Performance specified

Tools and vehicle use
Of course, almost every one of you owns a company vehicle and you’d much rather buy one than lease, though the latter option is more prevalent as firms grow in size. The same goes for tools. You’d rather own than lease. We asked about the tools purchased most frequently in 2003 and found 90 percent of firms bought power tools followed by

hand tools at 89 percent, multimeters at 79 percent of firms and mobile phones/two-way radios at 57 percent. Lifts and scaffolding (23 percent) and digging and boring equipment (16 percent) were at the bottom. It’s no shock that these two types of heavy, construction-site equipment were the mostleased tools in our survey, the only ones to have a lease rate higher than 10 percent. in new construction. An infusion of minorities in the workplace could cure the stagnation in average contractor age, and we’re sure you’ll seize greater control in procurement and adapt to a possible retrofit/renovation upswing. All of these somewhat cloudy issues may have a bright, shiny copper lining. We say 2004—and beyond—will be very good years to be an electrical contractor. EC FULMER, a Baltimore, Md.-based
freelance writer, can be reached at johnsfulmer@netzero.net.

METHODOLOGY/ABOUT THE SURVEY
The survey was conducted by postal mail and via the Internet between April 8 and May 10, 2004, among a random sample of ELECTRICAL CONTRACTOR subscribers. During that period of time, a total of 865 usable surveys were completed, 505 via the Internet and 360 via postal mail. There were no follow-up mailings. An incentive was offered for participation in the survey: For each completed survey, ELECTRICAL CONTRACTOR magazine would contribute $5 to charity. The margin of error on the total sample of 865 respondents is +/- 2.8 percent at the 90 percent level of confidence. Tables and figures contained in this article come from the data generated by this year’s Electrical Contractor Survey, which was conducted by New York, N.Y-based Renaissance Research & Consulting Inc. an independent marketing research firm that specializes in construction. They can be reached at smetzger@renaiss.com.

CONCLUSION

W

HAT LIES AHEAD? It’s a pretty good bet—in fact, bet the house—computer use, especially with sophisticated construction software, will grow. The rumored death of VDV—to borrow from Mark Twain—has been greatly exaggerated. As we said, look for more contractors to integrate low-voltage with traditional power and lighting. And we think three key areas will affect contractors in years to come: contractor age, procurement control and a possible decline

in managing, validating and optimizing equipment specified in the design; general contractors lack the electrical knowledge to pass on important new product information Distributors provide a valuable role for manufacturers; with no distributor, manufacturers need to increase customer sales and support roles thus adding cost; distributors offer services that can dramatically reduce the specialty contractor’s labor cost
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Owner may experience project delays or additional cost from material delays or material handling; electrical contractors know importance of fast job-site delivery and available inventory
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GCPM assumes general contractors can bypass distributors and contractors and buy manufacturer-direct; but many manufacturers require all customers to go through distribution, thus limiting product selection
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from the manufacturer to the job site where it’s stored until it is installed; in SCPM, distributors and specialty contractors schedule material flow to the job site. It is delivered as needed and can be packaged according to the area where it will be installed We feel you should be the key specifier for electrical products and supplies. You know what works best in a given application, and you have developed relationships with distributors that ultimately work to the owner’s advantage. Job-site

General contractors order material and have it shipped
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roles have become more flexible in the past decade, leading some general contractors to believe they should make all purchasing decisions. But this same flexibility can allow you to take the reins of a project, especially if the traditional general contractor has become nothing more than a dealmaker who puts projects together on paper. This flexibility also relates to the ascendancy of design-build where, from the very beginning, you work with a team to map out design and procurement.

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