National Factbook

It's safe to say that most distributors, manufacturers, reps and end users are disappointed with the pace of the U.S. economic recovery. The good news is we didn't fall into a double-dip recession and that while 2012 may be a year of slow growth for most electrical firms, it could be some very profitable growth. The recession forced businesses to do more with less, and business owners had no choice but to run their companies lean. As business picks up, companies may be able to pick up new orders at much higher margins than in the recent past.

The bad news is that it's hard to be overly optimistic about 2012's business prospects because of concerns about the budget debacle in Washington, D.C., Europe's economic mess, and a skittish stock market. The economic indicators in the following pages paint a picture of an economy slowly improving. Many of the data points with the most impact on the electrical market have bounced off the bottoms they experienced during the recession but are struggling to gain momentum, with the possible exception of the industrial market, which has weathered the economic storms better than the housing or nonresidential construction markets.

In last year's National Factbook, Electrical Wholesaling's editors pegged the industrial MRO and lighting retrofit markets as the best bets for growth. We haven't changed that evaluation in this year's edition. And we can't say that any big-time business opportunities have surfaced in the residential, commercial, institutional or utility markets, although pockets of growth are starting to pop up in the homebuilding markets, and some electrical companies will have some pretty major downtown redevelopment projects or data centers breaking ground in their backyards. Some truly massive utility-scale photovoltaic projects and wind farms are in full swing right now, but concerns about if the federal financial incentives that have fueled much of this growth will be cut in the budget discussion have clouded the growth prospects for some other solar and wind projects that had been on the drawing boards.

The data in this article will prove more valuable than the general economic forecasts you find in the business pages of most newspapers, because the papers focus more on retail sales, consumer spending and macroeconomic information rather than on data that directly affects the electrical market.

Copper Prices

Even industry veterans who have spent a lifetime selling wire and cable can’t really get a fix on which way copper is headed from year-to-year. It’s not likely to touch the historical range of 60 cents per pound to $1.30 per pound where it spent so much time before topping $3 per pound in 2006 and never looking back. In fact, the $3 level seems to have become the floor in the “new normal” for copper pricing. Other than a brief visit this past June, prices haven’t dipped below $3 per pound since 4Q 2009. Source: U.S. Geological Survey, MetalsWeek and www.metalprices.com

National Office Vacancy Rates

When looking at office vacancy rates, it’s all about the local numbers, because the data can change so much from the suburbs to downtown and even block-to-block in a city. McGraw-Hill Construction and Grubb & Ellis both say office vacancy rates have probably bottomed out, and McGraw-Hill expects the total contract value of new office construction to increase 5% next year to $17.35 billion. That definitely offers some reason for optimism, but it’s still a pretty bleak picture right now for office construction — 20 cities have downtown vacancy rates topping 20%. Source: Grubb & Ellis

Electric Utilities

Construction of new generating plants and updating existing infrastructure has been big news in the past few years, thanks to the development of solar power plants, wind farms and the smart grid. While these technologies are expected to grab the headlines again in 2012, McGraw-Hill expects utility construction to decline 24% in 2012 to 32 billion after registering gains of +34% and +48% in 2010 and 2011, respectively. The largest project expected to break ground next year is FPL’s $1.3 billion natural gas plant in Florida. Source: McGraw-Hill’s 2012 Construction Outlook

Purchasing Managers Index

As a measure of the appetite that industrial purchasing managers have for new products, the monthly Purchasing Managers Index is one of the most closely watched economic indicators in the manufacturing arena. It started strong in 2011 with several months scoring in the 60-point range — comfortably above the 50-point mark that indicates a healthy purchasing environment in the industrial market — but dropped about 10 points since April because of concerns about the slow U.S. economic recovery, the European economic mess and a double-digit recession. Source: Institute for Supply Management

Electrical Contractor Sales Potential

Metropolitan Statistical Area			State
Rank	Area	Sales Potential	Rank	State	Sales Potential
1	New York-Northern New Jersey-Long Island NY-NJ-PA	1,752,797,880	1	California	2,513,026,980
2	Chicago-Naperville-Joliet IL-IN-WI	1,020,472,320	2	Texas	2,468,039,640
3	Los Angeles-Long Beach-Santa Ana CA	787,563,180	3	New York	1,907,121,540
4	Houston-Sugar Land-Baytown, TX	758,520,720	4	Florida	1,583,668,260
5	Washington-Arlington-Alexandria DC-VA-MD-WV	739,728,540	5	Illinois	1,306,341,240
6	Dallas-Fort Worth-Arlington TX	577,432,440	6	Pennsylvania	1,182,768,420
7	Boston-Cambridge-Quincy MA-NH	462,970,980	7	Ohio	1,154,295,420
8	Miami-Fort Lauderdale-Miami Beach FL	460,123,680	8	Virginia	1,021,611,240
9	Atlanta-Sandy Springs-Marietta GA	437,914,740	9	Michigan	907,149,780
10	Detroit-Warren-Livonia MI	427,664,460	10	North Carolina	796,105,080
11	Seattle-Tacoma-Bellevue WA	407,163,900	11	Maryland	780,160,200
12	Denver-Aurora CO	396,913,620	12	Georgia	767,062,620
13	Baltimore-Towson MD	387,232,800	13	Washington	718,658,520
14	Philadelphia PA Metropolitan Division	382,677,120	14	Indiana	685,629,840
15	San Francisco-Oakland-Fremont CA	343,384,380	15	Colorado	667,407,120
16	Phoenix-Mesa-Scottsdale AZ	341,676,000	16	New Jersey	653,170,620
17	St. Louis MO-IL	318,897,600	17	Tennessee	615,016,800
18	San Diego-Carlsbad-San Marcos CA	312,064,080	18	Massachusetts	614,447,340
19	Seattle-Bellevue-Everett WA Metropolitan Division	293,841,360	19	Louisiana	575,154,600
20	Minneapolis-St. Paul-Bloomington MN-WI	276,188,100	20	Missouri	566,043,240
21	Nassau-Suffolk NY Metropolitan Division	271,062,960	21	Wisconsin	547,251,060
22	Pittsburgh PA	270,493,500	22	Minnesota	527,889,420
23	Santa Ana-Anaheim-Irvine CA Metropolitan Division	268,785,120	23	Arizona	481,763,160
24	Virginia Beach-Norfolk-Newport News VA-NC	267,076,740	24	Alabama	459,554,220
25	Warren-Troy-Farmington Hills MI Metropolitan Division	257,965,380	25	Kentucky	458,415,300
26	Cincinnati-Middletown OH-KY-IN	240,881,580	26	Iowa	387,802,260
27	Kansas City MO-KS	229,492,380	27	Oklahoma	379,260,360
28	Cleveland-Elyria-Mentor OH	224,367,240	28	South Carolina	353,634,660
29	Orlando-Kissimmee FL	212,978,040	29	Connecticut	343,953,840
30	Las Vegas-Paradise NV	204,436,140	30	Oregon	317,758,680
31	Indianapolis-Carmel IN	203,297,220	31	Kansas	305,230,560
32	Riverside-San Bernardino-Ontario CA	201,588,840	32	Utah	297,827,580
33	Tampa-St. Petersburg-Clearwater FL	201,588,840	33	Mississippi	289,285,680
34	Portland-Vancouver-Beaverton OR-WA	191,908,020	34	West Virginia	285,868,920
35	Oakland-Fremont-Hayward CA Metropolitan Division	190,769,100	35	Nevada	256,257,000
36	San Jose-Sunnyvale-Santa Clara CA	190,769,100	36	Arkansas	253,409,700
37	Columbus OH	190,199,640	37	Nebraska	253,409,700
38	Newark-Union NJ-PA Metropolitan Division	185,643,960	38	Idaho	167,990,700
39	Austin-Round Rock TX	182,227,200	39	New Mexico	162,865,560
40	Fort Worth-Arlington TX Metropolitan Division	182,227,200	40	Wyoming	160,018,260
41	Detroit-Livonia-Dearborn MI Metropolitan Division	169,699,080	41	Maine	146,351,220
42	San Antonio TX	167,990,700	42	Hawaii	141,795,540
43	New Orleans-Metairie-Kenner LA	166,851,780	43	Alaska	119,586,600
44	Charlotte-Gastonia-Concord NC-SC	164,004,480	44	New Hampshire	117,308,760
45	Richmond VA	162,296,100	45	North Dakota	115,030,920
46	Fort Lauderdale-Pompano Beach-Deerfield Beach FL Metropolitan Division	161,157,180	46	Montana	111,044,700
47	Omaha-Council Bluffs NE-IA	157,170,960	47	Delaware	89,974,680
48	Louisville-Jefferson County KY-IN	156,032,040	48	South Dakota	88,266,300
49	Jacksonville FL	154,893,120	49	Rhode Island	86,557,920
50	Oklahoma City OK	153,754,200	50	Vermont	55,237,620