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| Impact of the “New” Normal on the Electrical Supplier Industry Published September 2021 Just when you thought we were coming out of the Covid era, “boom” we are back into it with the mutating variants. Most have experienced these changes when trying to go to restaurants that are closed or short-staffed, or hotels that have reduced or eliminated amenities or even trying to go to your neighborhood gym (if it’s even open again). Are we really in the “post-COVID” era yet or still in the midst of this pandemic? And what long-term changes are we seeing in the construction and specifically, electrical, industry? How are the supply chains shifting their business models to address the market demands and challenges? A supply chain in the construction industry is made up of many moving parts, including manufacturers, distributors, and contractors. Good supply chain management can strengthen industry relationships, brand awareness and cost-efficiency. However, the emergence of COVID-19 has disrupted supply chains, increased lead times and prices, and creating shortages of labor and building materials. A combination of increasingly stringent sustainability requirements, material shortages, rising cost pressure, labor scarcity, new production approaches and digital tools are forcing our industry to innovate.  Construction Challenges and Solutions Good news and bad news. According to the latest forecast from Industrial Info Resources, construction project spending on capital projects is forecasted to decline by 6.9% overall in 2021, but good news is that there are reported growth opportunities within Food & Beverage (+8.4%), Industrial Manufacturing (+1.7%), Pharmaceutical (+1.4%), Pulp, Paper & Wood (+10.7%) and Metals & Minerals (2.6%). Recent data released by the Institute of Supply Management, cited that manufacturing activity expanded in April with 18 different sectors reporting growth, led by electrical equipment and appliances. That’s more good news for us. Whereas, there may be a slowdown in new project construction, there seems to be an uptick in renovations. The commercial construction industry may have been the worst hit of the construction sectors. This could be accounted for by economic uncertainty which has led to either delays or cancellations of projects and also disruptions of the supply chain within the industry. This has been reflected by a drop in contractors’ confidence in new business opportunities and expectations. According to the Buy American Act of 1933, manufactured goods in the United States are required to have more than 51% of their content produced in the U.S. However, construction industries in the U.S still rely on materials supplied by foreign countries. The ongoing pandemic poses a sourcing challenge that may lead manufacturers and construction firms to look for alternative sources of raw materials. Local companies may be forced to look in the direction of sourcing locally-reshoring back in the U.S or paying higher prices for supplies from less risky suppliers. Local manufacturers and distributors have found it difficult to fill the demand, resulting in postponed or cancelled projects. Projects that did not experience cancellations still had to deal with delivery delays. Many parts of the supply chain couldn’t afford to put extra money into maintaining shipping when there was no product to ship, resulting in long lead times. Leviton offers a useful tool to help their distributor partners manage their supply chain. The Leviton B2B Customer Portal provides users up-to-date information on orders, lead times, pricing and inventory and they can even place orders and manage returns. For more information on Leviton’s B2B Customer Portal and supply chain support, visit www.leviton.com/b2b.  Labor Shortages Slow the Rebound Today’s perceived labor shortage—the coexistence of record job openings with high unemployment—reflects COVID-related changes in labor supply and the dynamics of labor market re-equilibration during a period of rapidly rebounding demand. As projects begin to resume, the industry is facing a labor shortage, and some of the workers may never return to the construction industry. According to the U.S. Bureau of Labor Statistics data by Associated Builders and Contractors, the construction industry may have to hire as many as 480,000 new workers, and this number could keep increasing. With a shortage of labor, wages for skilled workers will continue to rise, and construction industry spending is expected to increase even more in 2021 and 2022. Leviton offers innovative time-savings solutions that can help get projects completed quicker. Lev-Lok® modular wiring devices can install 3 to 5 times faster than conventional wiring devices. In addition, Lev-Lok modular wiring devices allow for faster changeouts or upgrades. It’s basically a simple three-step process – install the modules in the wall during the rough-in, then simply push and lock in the wiring device and finish off with the wall plate. Visit www.leviton.com/lev-lok for more. Matching unemployed workers to job openings has become difficult due to the exhaustion of worker recalls, increasing skill gaps in particular occupations, and a closing employment gap. Leviton’s ez-Learn™ is an online training application to provide education for the skills and abilities needed to compete in today’s dynamic and ever-evolving electrical industry. ez-Learn™ is completely free by logging on and creating your own personal account, visit www.leviton.com/ezlearn for more information. The Changing Landscape: Electrical Contractors and Low Voltage Partnerships Today’s building designers, for both new facilities and renovations are looking at adding more smart applications which are integrated into a common network. In doing so, many of the previously disparate systems (i.e., security systems, lighting, HVAC) are now migrating to low-voltage cabling over a common telecommunications’ network to provide both data and power (PoE) to these applications, which ultimately, make these systems more efficient for the building owners. Smart contractors who can provision both electrical and low-voltage cabling services will be sought after by design consultants and GCs more often as PoE integration increases. Moving from conventional applications to “smart building” applications means employing more sensors To support, this Leviton offers distributors a wide range of sensor options to fit any commercial application. Some are engineered for very specific applications, yet others like the new Smart Wallbox Sensors have been developed to support a wide range of applications. Smart Wallbox Sensors provide a simple sensing and dimming control solution for easy energy savings and local control through easy programming and configuration. This includes an out-of-the-box default mode for auto-ON/auto-OFF operation with a 10-minute timeout as well as convenient pushbutton programming for common room settings. The Smart Sensor App, downloadable to all mobile devices can also be used to configure and enable additional features like sensor sensitivity, timeouts, daylighting, hold-OFF, partial-ON, partial-OFF and more. This solution is ideal for non-residential and commercial spaces up to 1,100 SF including offices, meeting rooms, and lobbies. See more about Leviton’s smart sensors at www.leviton.com/smartsensors Needless to say, touchless control has become hugely popular in residential applications as well. Decora Smart™ is Leviton’s recognized premier line of smart residential lighting and load control solutions. Decora Smart continues to evolve by adding more features to become smarter and has moved into the 2nd generation with more devices with expanded capabilities. As with all Decora Smart devices, everything is controlled through the My Leviton app which allows custom settings for each device. Through the My Leviton app, customers can program lighting scenes and scheduled events, and even select bulb types and fade rates, as well as many preset options. More information on Decora Smart products can be found at www.leviton.com/decorasmart  Keeping the Workforce Safe with COVID Protocols Businesses and employers are encouraged to coordinate with state and local health officials to obtain timely and accurate information to inform appropriate responses and procedures. However, the rules vary from state to state, city to city. Local conditions will influence the decisions that public health officials make regarding community-level strategies. Employers should implement and update as necessary a plan that:
Given the new normal that COVID-19 is creating, not just for the U.S. but the whole global economy, the construction sector will need to be flexible and incorporate changes that will allow it to function, and even thrive in all construction sectors. Leviton continues to support their contractors and partners with up-to-date information as we all navigate through these challenging times together. Previous Article | Next Article |
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