Where We Were and Where We Are Now
Looking back at the mid-2000’s, workforce development was the main focus at that time, then the Great Recession happened and survival became a way of life for the next 6-7 years. Let's fast forward to 2017. Now that the economy has rebounded – although different from prior years’ – workforce development is back as a top concern of most electrical contractors.
During the recession, we saw a 50% reduction in national enrollment with our apprenticeship program, which now translates into a much smaller skilled workforce today, and with the Baby Boomer generation nearing retirement, manpower has become a significant problem. In recent years, there has been a renewed focus to recruit young people into the trade industry using avenues such as high school job fairs and Internet blasts to attract students to our apprenticeship programs as an alternative to college. On top of this, we are also now challenged with many states raising the minimum wage, making it more difficult to attract young people.
Prefabrication is also a process many companies are now working toward developing to do either in house or by working with many of the companies who provide those services. This has created the ability to either use less field electricians or less skilled tradesmen while maintaining the needed volume of work that is currently available.
In Arizona, we are seeing a strong uptick of resort hotels, condominiums, high-end assisted living centers, and medical facilities to accommodate the upcoming Baby Boomer generation, which studies shown have more disposable income then generations prior, translating into more retirement spending.
It appears many millennials are opting for apartment living, which has shown a strong presence for the last 4-5 years. Housing is now making a strong comeback – particularly in the sunbelt states, many of which during the downturn saw the greatest decrease in home building.
Moving on to the solar market, it appears to continue to be strong in a few states, but has moved more from the private sector to utility grade solar farms due to many of the states and utility company rebates going away.
The tech industry is also moving in a very positive direction. Intel and Apple have announced large facility upgrades along with many of the other tech companies that support them.
With online sales becoming a large sector of the retail purchasing today, distribution facilities are in strong demand. Companies such as Amazon, along with any of the major retailers, are moving quickly to build these facilities all around the country to keep up with the online purchasing demands and quick delivery times. This has created many projects that are either currently happening or are moving forward in the near future.
Finally, backlogs of work are now becoming more common for most contractors, so for at least the next several years the outlook is improving significantly due to factors such as the new change in administration, which will bring changes to our current tax laws. These tax laws will become more favorable in the near future, allowing for significantly more spending to occur from not only the private sector but also from the military, which is also expected to rise.
The industry is currently looking to be in a strong place. While we still have our challenges ahead, we are in a better position to meet them head on and leave victorious.
Dean Kredit served as IEC’s 2013 National President. As the principal elected officer of the association in 2013, Kredit served as the Chair to the Board of Directors, House of Delegates, and Executive Committee. He is also the president of K2 Electric in Phoenix, AZ.