SIC 1731 Electrical Work

 
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SIC 1731

This category covers special trade contractors primarily engaged in electrical work at the site. The construction of transmission lines is classified in SIC 1623: Water, Sewer, Pipeline, and Communications and Power Line Construction, and electrical work carried on in repair shops is classified in SIC 7622: Radio and Television Repair Shops; SIC 7623: Refrigeration and Air-Conditioning Service and Repair Shops; or SIC 7629: Electrical and Electronic Repair Shops, Not Elsewhere Classified. Establishments primarily engaged in monitoring of burglar and fire alarms with incidental installation are classified in SIC 7382: Security Systems Services.

NAICS CODE(S)

561621

Security Systems Services (except Locksmiths)

235310

Electrical Contractors

INDUSTRY SNAPSHOT

The electrical contracting industry in the United States is made up of a few large firms doing business in many regions and a large number of small companies that generally serve customers in their local vicinities. Many of these smaller firms are family owned. Most work in this industry depends on intense competitive bidding, and the obtaining and completing of contracts makes for fluctuating needs for skilled electricians. Most electrical contract work companies are nonunion, but there is a strong union that is influential in some parts of the industry.

In 2002, the industry had approximately 61,400 establishments with 642,000 electricians. After experiencing growth in the mid- and late-1990s, due to nationwide economic improvement and a boom in housing construction, the bottom fell out of the commercial and industrial building industry. Although residential building continued, fueled by low interest rates, commercial development projects fell during 2002 to the lowest levels since 1996. After peaking in 2000 at 66,800 firms with 698,000 employees, the number of electricians and electrical firms declined over the next years to reflect 1997 employment levels. Although the industry stabilized slightly in 2003, many electricians are diversifying their skills and their client base to adjust to the changing economy. New focuses include home networking and security system installation.

In 2004, the total number of electrical contracting firms climbed to about 102,640, with 804,404 electricians. Together, they shared approximately $95,808.60 million in annual sales. The majority of the electrical companies were small, employing about eight electricians. Electrical work represented the largest sector within the industry, with 55.2 percent of the market. Combined, they shared $29,925.1 million in annual sales. The general electrical contractor controlled 28.6 percent, with completed work generating $46,289.398 million in sales. States representing the majority of the electrical firms were California with 11,173; Florida accounted for 6,377; New York had 6,362; Texas numbered 6,352; and Michigan with 3,503.

ORGANIZATION AND STRUCTURE

While the wide range of company sizes and large number of firms in electrical contracting make for diversity of operations, there are certain patterns relating to the types of customers and jobs, internal functions, costs, union and nonunion conditions, trade associations, training, and governmental regulations and standards.

Customers and Jobs

Electrical contracting firms, as well as other trade contractors, generally do their work at the construction or facility site, though some specialty work may be done in their own shops. When a new building is constructed, these trade contractors are retained by a general contractor who is responsible for the entire building's construction. The specialty contractors, however, are sometimes subcontractors of other subcontractors and, at other times, especially with repair and maintenance jobs, may deal directly with the facility's owners. The ultimate customers are individual homeowners, businesses, institutions, and governmental agencies, each of which has its own manner of dealing with contractors and subcontractors.

Size of Operating Units

About 10 percent of electrical contracting establishments in 1997 had 20 or more employees, and these establishments controlled 60 percent of all business. Only nine establishments had 1,000 or more employees. Establishments are considered to be generally permanent places, where estimating, procurement, and management of work is done for one or more sites. Larger firms may have a number of such establishments.

Internal Functions

Whether an electrical contracting firm is an individual or a company with 500 employees, it performs the necessary business functions of marketing, estimating, planning, scheduling, purchasing, accounting, and training. The estimating function is especially important in the electrical contracting industry because many jobs are obtained on the basis of competitive bids. Jobs bid too low result in losses, and bids that are too high result in business lost to lower bidding competitors.

Costs

Principal costs are materials and labor. In 1997, the cost of materials and supplies amounted to 36.6 percent of the total value of electrical contractors' work, and their payrolls came to 33.5 percent of that total. Other costs included subcontracted work, rentals for machinery and facilities, fuel, and other overhead and administrative costs.

Unions

The International Brotherhood of Electrical Workers (IBEW) is an American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) affiliate that dates back to the 1890s. Generally, the electrical contractors in larger cities have had larger numbers of union employees. The number of nonunion shops increased during the 1980s, and the IBEW launched a campaign to strengthen its membership. Membership is still down from its high of more than 1 million. In the late 1990s, the IBEW counted 750,000 members in more than 1,100 local unions in both the United States and Canada.

Standards and Regulations

The National Electrical Code (NEC) was established to provide electrical work guidelines to assure avoidance of hazards. The code was fostered by the American National Standards Institute and by the National Fire Protection Association. The code is revised and updated every...

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