Amid COVID-19, Electrical Industry Favoring Commercial Work
March 21, 2021
The last year has brought a lot of change. Social distancing and lockdowns went into effect as California came to grips with a worsening pandemic. Even as the year progressed and we began to better understand COVID, it was hard to predict how the lockdowns and changes in public behavior would disrupt our economy.
We are just now beginning to understand how the economy has changed. The electrical industry has certainly been affected, but the good news is that it seems to have not lost much steam compared to other hard-hit industries. However, it’s been a balancing act, with some sectors suffering, while others have strengthened.
Let’s take a look at what we’ve learned about the electrical industry in the past year.
Electrical contractors that were focused on retail are hurting—the market has shifted toward industrial type spaces, like warehouses and other supply chain-related facilities.
When the economy was shut down, the retail and restaurant industries were hit particularly hard. With demand for dining and non-essential in-person shopping down, the retail sector lost close to 3 million jobs, and the restaurant industry lost more than 6 million jobs.
Any plans for renovations, expansions, and new locations came to a halt, sharply reducing the need for electrical workers in the retail space.
On the flip side, industrial type electrical work experienced growth in 2020. People transitioned to shopping online for both retail goods and groceries. Warehouses, in particular, became incredibly important. With the supply chain strained, especially at the beginning of the pandemic, businesses moved quickly to keep their shelves stocked. They expanded their existing warehouses and in some cases opened new ones. With that came new opportunities for electrical workers.
Construction spending was also up tens of billions of dollars in 2020 compared to 2019. This, again, signals that electrical jobs are to be found on industrial job sites.
Total job numbers in the construction industry, which includes electrical jobs, are down compared to before the pandemic. But unlike some other hard-hit industries, job losses haven’t been drastic.
Before the pandemic, there was a lot of optimism that the electrical industry would grow rather quickly in the immediate future. Even in late 2020, we discussed how there was still an optimistic outlook, though we were unsure about how the pandemic might change things.
The construction industry added jobs every month from April 2020 to December 2020. However, the industry is about 200,000 jobs short of where it was in February 2020, before the pandemic hit. In our experience, some electrical employers in Sacramento and the larger Northern California region are hiring, whereas others are laying off. In general, the job market is holding steady, with an emphasis on industrial work.
But many questions remain about other sectors, particularly with regard to office buildings, which pre-COVID had been viewed as a type of real estate development for which there would continue to be strong demand, while brick-and-mortar stores declined due to competition from online stores. Many office jobs have shifted to remote work, with some large companies signaling they will stay remote post pandemic due to the money saved by reducing office space. We do wonder how the electrical market will react in the long term. Will there be fewer commercial job opportunities if there are fewer office buildings being used? Will residential electricians get more work as people spend more time at home? Again, we will keep an eye on things to see if and how the electrical market pivots.
When should the electrical industry expect to see job growth?
There is no real way of knowing. The United States’ vaccine rollout has been largely a success, and some states have decided to fully reopen. In California, counties are progressing to less-restrictive tiers, though not at the same pace.
We certainly hope the vaccines continue to bring good news, but nobody can say for sure when we will return to pre-pandemic life—and nobody knows when we’ll see job numbers get back to where they were pre-pandemic. We will continue to keep a close eye on the electrical job market going forward.
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