Latest from Market Forecasts

33574911 / khunaspix / DreamsTime
58217280 © Jakub Jirsak / DreamsTime
Building Market Share Photo 58217280 © Jakub Jirsak Dreamstime

Sponsored

Getty Images
Market Data Getty Images 952510084 Mf3d 637bde716ac11

A Look at 2023

Nov. 21, 2022
DISC Corp.'s Chris Sokoll says 2023 may be a year of negative growth for the electrical market.

Indications are 2022 will be another good year. While DISC (www.disccorp.com) sees a slowdown, the year as a whole should be up +11% (give or take) from 2021’s impressive performance. However, this year’s increase was not all demand driven, because the year-over-year (YOY) price increase of +16% contributed significantly to 2021’s gains.

The electrical economy started to tap the brakes on the 2022 double-digit growth in 2Q 2022 with additional demand deceleration throughout the year. The four Federal Reserve (FED) driven interest rate increases from May to September have really started to cool off the momentum. The FED has increased the Federal Funds rate from 0.75% to 3.25%, potentially with more rate increases on the horizon before year-end. As intended, this is a big detractor of investments and will continue to slow demand and cool prices.

2023 will be a year of working with a recessionary environment. Here at DISC, we started thinking about the possibility of recession back in August as the Federal Reserve was planning another rate hike. Our 2023 forecast has the electrical wholesale community at $126.4 billion in total sales, down from $136.6 billion in 2022. In total, 2023 will be off 2022 sales by -7.5%. The largest losses will be in the contractor vertical market with YOY reductions in electrical construction investments off -10%. We are forecasting demand weakness in industrial, institutional, and utility markets as well. We are projecting a rally starting in the fourth quarter of 2023 with returns to positive year-over-year results by Q3 2024 and Q4 2024.

On a positive note, the Inflation Reduction Act looks to position the electrical distribution community for great long term growth opportunities. Here are the highlights:

  •  $27 billion to deploy low and zero emissions technologies
  •  $1 billion to advance zero emissions heavy duty vehicles
  •  $1 billion in Zero Building Energy Code adoption
  •  $750 million to facilitate the sitting of interstate electricity transmission lines
  •  $87 million towards low-emission electricity programs

This a just a small portion of the potential upside for our industry. There are also tax incentives focusing on combating climate change along with clean energy tax credits. Read the 12-page summary of the legislation prepared by the bi-partisan National Conference of State Legislatures at www.ncsl.org.

While 2023 may be a bit of a challenge, the long-term prospects for the electrical business remain strong. Looking at new opportunities and understanding the market and available resources will help you outperform the market. DISC is here to provide you with market intelligence and forecasts to help you navigate the road to success. For more information on our data, contact us at 346-339-7528 / [email protected]

About the Author

Christian Sokoll

Meet Chris Sokoll

Chris began his career in the electrical industry 30 years ago in Spokane, WA, in the way so many in the electrical wholesaling space have – working the counter and the phones. He relocated to Phoenix, Arizona, and continued his career progression in an inside sales role with King Wire covering the Southwest. His next stop was Atlanta, where he continued to learn the business and worked the Southeast region. Little did Chris know that a move back to Washington state would start a career with Houston Wire & Cable that would span nearly three decades.

Chris was named “New Salesperson of the Year” in 1991 for his outstanding results and won additional awards for sales growth by supporting oil and gas exploration in the North Slope and managing a joint contract with Boeing. He progressed in his career taking an outside sales position in Lexington, KY, working with electrical distribution business development on major corporate accounts such as Mead Paper, DOW / Dupont, and the Savannah River Project. Chris was promoted to Regional Manager over the Southeast and again proved himself by significantly growing both sales and profitability.

Chris was asked to take on a turnaround project for Houston Wire & Cable’s Midwest Region, headquartered in the Chicago metro area, where he nearly tripled the region’s sales – from $24 million to $74 million. During his tenure in Chicago, Chris won numerous management and vendor awards for new product rollouts, sales growth, and national account management. His team won more “President’s Circle” sales awards than any of the other 11 Houston Wire & Cable locations. This high level of performance resulted in Chris earning a position as Regional Vice President.

Chris’s next stop was as Division President for Southern Wire, a heavy lift equipment wholesale subsidiary of Houston Wire & Cable based near Memphis, TN. He took this position post-acquisition and integrated the division, managed a transition of computer systems, and developed a segmented market plan while retaining all employees. Chris was able to buy out a competitor’s inventory, resulting in their exit from the market, and then hired their VP of Sales to step in as President of Southern Wire. This facilitated Chris’s next role as Corporate VP of National Business Development based in Houston, where his first responsibilities included continued oversight of Southern Wire, managing the Cable Management Services Project Group, and directing the National Service Center, a training and development group for new sales professionals entering the industry.

During this time overseeing so many critical divisions, Chris became more immersed in business intelligence and market data analysis – leading to innovative internal changes at Houston Wire & Cable. Chris learned to use and blend data from multiple sources such as DISCCORP, Industrial Information Resources (“IIR”), and ERP and CRM data to aid the company in embracing data and visualization tools in a completely new and unprecedented fashion. Chris deployed industry-leading corporate analytics and business intelligence tools such as Tableau, Power BI, Alteryx, Access, and Excel to inform and improve decisions and track KPIs. Likewise, he provided reporting for the board of directors and senior management team both in spreadsheets and in various advanced visual presentation formats. Chris also designed, tracked and approved compensation programs for sales reps and agents, and was also instrumental in the design and tracking of customer rebate programs.

In 2019, after working closely with DISC Corp. as a customer for five years and thus seeing the ongoing need for quality market intelligence data for the industry, Chris left Houston Wire & Cable to purchase DISC Corp. from its founder, Herm Isenstein. Along with being the leading economist in the electrical market for more than 30 years through his work at DISC, Herm was also a prolific author for Electrical Wholesaling magazine.

Herm passed away in Sept. 2019, but Chris continues to grow DISC’s vision while maintaining its leadership position as a trusted data source. By diligently working alongside  DISC Corp.'s economists, programmers, and marketers, Chris embraces his passion to ensure that DISC continues delivering high-quality business intelligence and forecasting to further the future of the electrical wholesaling industry.

Chris holds a bachelor’s degree in organizational leadership from Roosevelt University in Chicago and a graduate certificate in finance from the University of Chicago. Chris has completed various Microsoft training programs in Excel and Access in addition to data science theory, and he has written college-level course material on Microsoft Power BI and Excel.

Sponsored Recommendations