Electrical Equipment Manufacturing in The US Industry Report

Electrical Equipment Manufacturing in the US August 2012 1
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Sparking interest: Increasing exports and

recent legislation will benefit manufacturers
IBISWorld Industry Report 33531
Electrical Equipment
Manufacturing in the US
August 2012
Justin Waterman
2 About this Industry
19 International Trade
34 Regulation & Policy
Industry Definition
21 Business Locations
34 Industry Assistance
Main Activities
Similar Industries
23 Competitive Landscape
36 Key Statistics
Additional Resources
23 Market Share Concentration
36 Industry Data
23 Key Success Factors
36 Annual Change
23 Cost Structure Benchmarks
36 Key Ratios
4 Industry at a Glance
25 Basis of Competition
5 Industry Performance
26 Barriers to Entry
Executive Summary
26 Industry Globalization
Key External Drivers
Current Performance
28 Major Companies
Industry Outlook
28 General Electric Company
12 Industry Life Cycle
37 Jargon & Glossary
29 Eaton Corporation
30 ABB Ltd.
14 Products & Markets

14 Supply Chain
32 Operating Conditions
15 Products & Services
32 Capital Intensity
17 Demand Determinants
33 Technology & Systems
17 Major Markets
33 Revenue Volatility
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About this Industry

Industry Definition
Firms in this industry primarily

manufacture: power, distribution and
specialty transformers; electric motors,
generators and motor-generator sets;
switchgear and switchboard apparatus;
Main Activities
The primary activities of this industry are
relays; and industrial controls. Electrical

equipment manufacturers distribute their
products to other manufacturing
industries as well as to wholesalers and
the construction industry.
Switchgear manufacturing
Switchboard apparatus manufacturing
Motor and generator manufacturing
Relay manufacturing
Industrial controls manufacturing
Power, distribution and specialty transformer manufacturing
The major products and services in this industry are

Motors and generators
Relays and industrial controls
Switches
Transformers
Similar Industries
33361a Engine & Turbine Manufacturing in the US

This industry manufactures a range of turbines, engines, and equipment used for power transmission, such
as generators.
33361b Wind Turbine Manufacturing in the US
This industry includes manufacturers of wind turbines for residential, industrial and commercial use.
33399 Power Tools & Other General Purpose Machinery Manufacturing in the US
Manufacturers in this industry create welding and soldering equipment.
33441a Semiconductor & Circuit Manufacturing in the US
This industry manufactures electronic component-type transformers and switches.
33441b Circuit Board & Electronic Component Manufacturing in the US
This industry manufactures electronic component-type transformers and switches.
33451a Navigational Instrument Manufacturing in the US
This industry manufactures navigational, measuring and control instruments.
33451b Medical Device Manufacturing in the US
This industry manufactures electromedical and electrotherapeutic devices.
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About this Industry
Similar Industries
continued
33593 Wiring Device Manufacturing in the US

This industry manufactures switches for electrical circuits, such as pushbutton and snap switches.
33632 Automobile Electronics Manufacturing in the US
This industry manufactures starting motors and generators for internal combustion engines.
Additional Resources
For additional information on this industry

www.bls.gov
Bureau of Labor Statistics
www.nema.org
National Electrical Manufacturers Association
www.census.gov
US Census Bureau
IBISWorld
writes over 700 US

industry reports, which are updated
up to four times a year. To see all
reports, go to www.ibisworld.com
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Electrical Equipment Manufacturing in the US August 2012
Industry at a Glance
Electrical Equipment Manufacturing in 2012
Key Statistics
Snapshot
Revenue
Annual Growth 07-12
Annual Growth 12-17
Profit
Exports
Businesses
$39.3bn -3.2%
3.8%
$13.5bn 1,841
$2.3bn
Per capita disposable income
Revenue vs. employment growth
Market Share
General Electric
Company 10.9%
20
% change
ABB Ltd. 5.8%
10
% change
Eaton Corporation
10.4%
10
20
30
Year 04
06
Revenue
08
10
12
14
16
18
Year
06
08
10
12
14
16
18
Employment
SOURCE: WWW.IBISWORLD.COM
p. 28
Products and services segmentation (2012)
16.5%
Transformers
Demand from building,

developing and
general contracting
32%
Per capita disposable

income
Motors and generators
Demand from
manufacturing
Total imports
Industrial
production index
25.5%
Switches
26%
p. 5
Relays and industrial

controls
SOURCE:
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SOURCE:
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Industry Structure
Life Cycle Stage

Revenue Volatility
Capital Intensity
Mature
Regulation Level
Medium
High
Technology Change
Medium
Low
Barriers to Entry
Medium
Industry Assistance
Medium
Concentration Level
Low
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 36
Industry Globalization
Competition Level
High
Medium
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Industry Performance
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
Revenue for the Electrical Equipment

Manufacturing industry has grown every
year since 2007, except 2009, when it fell
24.6% in response to recession-related
declines in demand. This significant dip
has led to revenue falling at an
annualized rate of 3.2% over the five
years to 2012. Although the industry
grew in four out of the five years since
2007, various factors limited revenue
gains. Nonetheless, revenue is expected
to increase 2.6% over 2012, earning US
manufacturers of electrical equipment
$39.3 billion, which includes $25.8
A
rise in import penetration will slightly offset

increased demand for electrical equipment
billion from local sales and $13.5 billion
from export sales. The expected rise in
revenue is a result of increased consumer
spending and demand for industry
products from downstream construction
and manufacturing industries.
Industry sales have declined due to a
decrease in domestic demand for
industry products and a loss of domestic
market share to imports; exports have
stayed relatively flat, declining at an
average 0.3% per year since 2007. On the
other hand, import penetration has risen
partly due to the transfer of some
production capacity from the United
Demand from building, developing

and general contracting
The construction industries are major
users of electrical equipment, such as
switchboard apparatus and controls for
automating and regulating heating,
ventilation, air conditioning, electricity
and lighting. Therefore, as construction
activity increases, so does demand for
electrical equipment. This driver is
expected to increase significantly during
States to lower-cost countries. While

domestic demand for electrical
equipment is expected to be worth $51.3
billion in 2012, imports are estimated to
satisfy $25.6 billion, or 49.8%, of this
total. Increasing import competition has
also led to plant closures and
consolidation, as some domestic
operators were unable to keep pace with
the lower prices. Consequently, the
number of establishments is expected to
decline at an average annual 2.4% to
2,091 in 2012.
Energy issues have also hampered
industry performance. Increasingly,
evidence has pointed to the consumption
of fossil fuels, which create electricity, as
the main cause of the worlds changing
climate. Looking ahead, environmental
concerns will drive demand for solutions
that provide secure and energy-efficient
electrical equipment while satisfying the
growing demand for electricity. In the
five years to 2017, domestic demand for
industry products is forecast to increase
at an average annual rate of 5.7%,
supported by an aging electrical
infrastructure. Over the same period,
export growth will return at an average
annual rate of 7.9%, though an increase
in import penetration will partly offset
this opportunity for growth. Even with
this potential setback, industry revenue is
forecast to grow at an average annual rate
of 3.8%, reaching $47.3 billion in 2017.
2012, presenting a potential opportunity

for the industry.
Personal expenditure influences this
growth in this industry. During a
recession, spikes in unemployment lead
to declines in consumption levels.
Alternatively, consumers will be more
likely to spend money on electrical
equipment purchases when they have
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higher disposable incomes. This driver is

expected to increase slowly during 2012.
Demand from manufacturing
The Electrical Equipment Manufacturing
industry produces motors and other
various components used in downstream
production lines. As the level of
manufacturing activity increases,
production lines expand, and demand for
electrical equipment increases. An
increase in automated production lines
also stimulates demand for electrical
industrial controls. This driver is
expected to increase during 2012.
Total imports
Revenue generated from electrical
equipment is only relevant to this
industry if the electrical equipment is
manufactured in the United States. As
import penetration rises, more domestic
demand is satisfied by electrical

equipment manufactured abroad,
resulting in a lower industry share of
revenue. This driver is expected to
increase in 2012, representing a potential
threat to this industry.
Industrial production index
The industrial production index
measures the output of the
manufacturing, mining and utility
sectors. The industrial sector is a major
user of electricity; as industrial
production grows, the sectors demand
for electricity grows, thus promoting
spending on electrical infrastructure. The
sector also relies on electrical equipment
to add value and transform inputs into
products; therefore, industrial activity
also influences demand for capital
equipment. This driver is expected to
increase during 2012.
Demand from building, developing and
general contracting

4
20
10
% change
% change

continued
0
2
4
Year
0
10
20
06
08
10
12
14
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30
Year
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Current
Performance
IBISWorld estimates revenue for the

Electrical Equipment Manufacturing
industry has decreased at an average
annual rate of 3.2% since 2007. Overall
loss has mostly been a result of
recession-driven declines in demand for
industry products. In 2009, domestic
demand for electrical equipment
plummeted 23.4%. In addition, exports
decreased 23.2%, causing revenue to
fall 24.6% in the same year. Meanwhile,
domestic manufacturers lost part of
their share of the US market to imports,
which rose 49.8% in 2012. Surging
import penetration was due in part to
the offshoring of production to low-cost
Profit pressures
In light of profit pressures and even

declines in 2007, operators implemented
extreme cost-cutting measures in 2008
and 2009 to improve margins. A greater
focus on selling higher-margin products,
improving prices, consolidating and
enhancing productivity also contributed
to offsetting the high costs adverse
effects on profit. Thus, increased
pressure, both internally and externally,
forced firms to become more efficient. As
a result, operators are expected to
achieve greater profitability than in
2007, with margins reaching 5.8% of
revenue in 2012.
Moderate revenue growth and
increasing import competition has also
led to plant closures and consolidations
since 2007. In addition, some US
manufacturers have increased the
proportion of total production being
conducted at overseas plants. As a result,

the number of industry establishments is
expected to fall at an average annual rate
of 2.8%, decreasing from 2,407 in 2007
to 2,091 in 2012. The number of industry
employees has also decreased as a way to
cut costs in the face of declining profit
and offshoring. The number of
employees is expected to decrease at
anaverage annual rate of 6.0% to
101,677 over the five years to 2012. In
addition, average employee per
establishment has fallen from 57 in 2007
to about 49 in 2012, indicating efficiency
gains in the industry.
The industry sells a broad range of

products to an even broader range of end
customers, so industry performance
relies on several factors. First, the US
macroeconomic environment
particularly the levels of industrial
production, fixed investment and

construction activity will influence
performance. The use of electrical
products and demand for more efficient
electrical equipment that can cut energy
losses will also determine the industrys
Investments decline
countries. Additionally, higher input

costs increased the industrys producer
prices through 2011, opening the door
for cheaper imports from countries with
lower operating costs. Producer prices
are expected to increase further in 2012
due to an increase in raw material
prices stemming from the strengthening
global economy. In the five years to
2012, increases in the cost of raw
materials, along with weak sales during
the recession, ultimately hampered
profit growth, spurring manufacturers
to become more efficient. IBISWorld
forecasts revenue to grow 2.6% to
$39.3billion in 2012.
Substantial
cost-cutting
measures have helped
profit margins expand
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growth. New technologies and

production costs in the United States can
encourage companies to offshore
production abroad.
Prior to being cut off by the recession,
investment in electric transmission was
significant. Power outages in 2003
emphasized the need to upgrade
transmission infrastructure. In addition,
in 2005, legislation aimed at improving
transmission-grid infrastructure and the
reliability of power availability was
passed. These factors contributed to an
upturn in spending on electrical
equipment by power transmission
companies in the four years through
2008. However, slow economic
International
expansion
In 2007 and 2008, exports rose on the

back of greater demand and a
depreciated US dollar. In 2009,
however, the slowing global economy
and tighter global credit caused a
slowdown in exports. Export growth
resumed in 2010 and 2011 as the
global economy began to recover,
promoting some restocking of
electrical equipment. Nonetheless,
because of the deep drop in exports in
2009, the value of US electrical
equipment exports is expected to
decrease at an annualized rate of 0.3%
in the five years through 2012.
Chinas presence as a provider of
electrical equipment has grown
stronger over the five-year period; its
share of imports is expected to rise from
12.1% in 2007 to 17.8% in 2012. This
growth is due particularly to its
increased production of transformers
and industrial controls. Meanwhile,
conditions, tight credit markets and

weak demand for energy limited
spending from the fourth quarter of
2008 through 2010.
Though weak economic activity and
industrial production from 2008 through
2010 negatively affected spending on
new equipment, some industrial
companies invested more in automated
equipment to help streamline processes,
reduce energy consumption and lower
costs. Increased computerization has also
exposed businesses to power outages and
variations, which promote spending on
products that improve electrical supplies
reliability, including generators and
uninterruptible power supplies.
Revenue vs. exports

20
10
% change
Investments decline
continued
0
10
20
30
Year 04
Revenue
06
08
10
12
14
16
18
Exports
Mexicos share is forecast to slowly rise

from 32.2% to 33.3% over the same
period. The total value of US imports of
electrical equipment is expected to
increase at an annualized rate of 2.8%
in the five years through 2012 despite a
large decrease in 2009.
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Domestic demand
recovers
Private non-residential construction

and industrial production, both
downstream industries, are expected to
decline in the five years to 2012,
according to the Bureau of Economic
Analysis and the Federal Reserve.
Though residential and private building
activity has fallen in recent years, the
desire for more comfort in homes and
for safety and security products has
helped counter the negative trend.
Despite weak levels of consumption
resulting from subdued economic
conditions from 2008 through 2010, the
volume of electricity consumed in the
United States is expected to increase in
the five years through 2012 as economic
recovery gains traction. Fossil fuels are
the major energy sources used in

generating electricity in the United
States, and they account for about 70.0%
of electricity generated in the country.
However, increasing evidence points to
the consumption of fossil fuels as the
main cause of global climate change.
Concerns about the environment, rises in
fossil fuel and electricity prices and aging
electrical infrastructure will drive
demand for solutions that provide secure
and energy-efficient electrical equipment.
Industry
Outlook
Demand for efficient energy

performance and increased electrical
current quality will drive growth in the
industry during the next five years.
During this period, average growth of
5.7% per year in domestic demand and
7.9% average annual growth in exports
will boost revenue, partially offsetting
anticipated increases in import
penetration. As a result, revenue is
forecast to increase at an average annual
rate of 3.8% to $47.3 billion over the five
years to 2017, with revenue growing
3.8% to $40.8 billion in 2013.
Some of the industrys major players
have shifted production capacity to
countries where production costs are
lower. As a result, import penetration is

forecast to increase, rising from 49.8% in
2012 to 59.1% in 2017, negatively
affecting industry revenue. These imports
will pressure unit prices in the US
market, limiting revenue and profit.
Despite offshoring operations, the
number of domestic industry
establishments is forecast to increase at
an annual rate of 3.8% to 2,514 in the five
years to 2017. In response to construction
expansion and increased demand for
energy-efficient electrical equipment,
more companies will participate in the
industry. Industry employment is
expected to follow suit, rising at an
annual average rate of 0.3% to 103,409
people in 2017.
Helpful legislation
In June 2008, the Federal Energy

Regulatory Commission (FERC) stated
that there are tremendous investment
needs for electricity generation,
distribution and transmission from 2010
to 2030. In light of these needs, spending
on power infrastructure is projected to
grow at a strong pace over much of the

next five years due to the need to replace
aging infrastructure. Lawmakers and
regulators have taken note of FERCs
findings and, through 2017, domestic
demand for industry products is forecast
to pick up thanks to recent legislation.
Demand
from downstream
industrial and construction
industries has fallen
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Helpful legislation
continued
For example, congress passed the US

Energy Independence and Security Act
in December 2007. This act was enacted
to supplement the Energy Bill of 2005,
which encourages increased capital
spending on grid modernization and
investment in more efficient electrical
equipment to reduce energy loss. In
addition, enhanced national standards
set forth by the North American Electric
Reliability Organization and the
Department of Energys designation of
National Interest Electric Transmission
Corridors in 2007 may also drum up
demand for industry products over the
coming years. Among other things, the
law mandates renewable fuel standards,
sets energy equipment standards and
encourages development and

investment in intelligent electric
network technologies.
Meanwhile, global warming concerns
have stimulated investment in alternative
power generation, including renewable
energy. An expectation of high future
energy costs and efforts to increase the
security of energy supply will positively
influence spending. In addition, demand
for improved quality and reliability of
electricity will drive the industry forward.
Other factors that will likely spur

demand for power infrastructure
include load growth in cities and
suburbs, which will drive system
replacement and expansion. Brownout
and blackout incidents related to aging
infrastructure will sporadically create
short-term demand for equipment.
Also, power-generation additions,
especially wind power, will create a
need for transmission.
Building construction activity
stimulates demand for electrical
equipment, particularly in the switchgear
and switchboard segment and, to a lesser
extent, in the relay and industrial control
segment. In addition, building activity

often includes heating, ventilation and
air conditioning (HVAC) systems and
appliances, which incorporate electric
motors. Home building activity is
forecast to gradually rebound over the
next five years (following a severe
contraction over the previous five years)
due to a strengthening of the US
economy, an increase in home
affordability and pent-up demand for
new homes. The desire for more
comfort,safety and security products in
the home will also have a positive effect
on demand for electrical equipment in
residential homes.
Hampered investment The slow economic recovery worldwide is
commercial building construction is

projected to lift in 2013 as the US
economy strengthens and investment
continues growing through 2017.
The level of US industrial production
largely determines domestic demand
for industry products, particularly in
the motor, generator, relay and
industrial control segments and, to a
Infrastructure
investments and
regulation
expected to herald low levels of

commercial property development early
in the next five years. Low levels of
capacity usage and relatively high levels
of unemployment will combine to
dampen investment in offices, hotels,
retail buildings and amusement facilities
in 2013. Still, the value of total
Legislation
incentivizing
infrastructure upgrades
will help boost demand
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Hampered investment lesser extent, in the switchgear and

switchboard segments. US industrial
continued
production is forecast to show some

signs of recovery in each year through
2017. Competitive pressures will drive

US companies to spend on electrical
equipment that facilitates automation
and energy conservation.
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Life Cycle Stage
The trend toward consolidation is

intensifying in the industry
Growth in industry activity has been slow
%Growthofprofit/GDP
Import penetration is increasing
Maturity
30
QualityGrowth
Company
consolidation;
level of economic
importance stable
25
High growth in economic

importance; weaker companies
close down; developed
technology and markets
KeyFeaturesofaMatureIndustry
Revenue grows at same pace as economy
Company numbers stabilize; M&A stage
Established technology & processes
Total market acceptance of product & brand
Rationalization of low margin products & brands
20
15
QuantityGrowth
Many new companies;

minor growth in economic
importance; substantial
technology change
10
ElectricalEquipmentManufacturing
Shake-out
Iron&Steel
Manufacturing
HeavyIndustrialFacilitiesConstruction
Decline
Crash or Grow?
10
10
Shake-out
WindTurbineManufacturing
Engine&TurbineManufacturing
ConstructionMachineryManufacturing
PotentialHiddenGems
TimeWasters
Future Industries
5
10
Hobby Industries
15
20
25
30
%Growthofestablishments
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Industry Life Cycle

This
industry
is Mature
This industry has an opportunity to

capitalize on growing domestic and
overseas demand for electrical
equipment that is reliable and offers
energy-efficient solutions. Yet the
industry is expected to contract slightly
as a share of the US economy during the
10 years through 2017. This contraction
is due mainly to a decrease in demand
for electrical equipment and an increase
in import penetration early in this
period. In the five years to 2017, much
of the forecast growth in industry
revenue will come from sales to
customers who previously deferred
investment in equipment.
Slowing industry growth
Despite increasing demand for industry
products over the 10-year period,
IBISWorld expects that the industry still
will lag behind overall US economic
growth, largely because imports will
account for a rising share of domestic
demand. Over the 10 years to 2017,
industry value added (IVA), which
measures an industrys contribution to
GDP, is expected to rise at an annualized
rate of 1.5% per year. To compare, GDP is
expected to grow at an average annual
1.9% over the same period. Due to this
lag, the industry is estimated to be in a

mature phase of its life cycle.
In addition, the number of
establishments is expected to rise only at
0.4% per year on average in the 10 years
to 2017. As cost pressures from foreign
competition build, firms will refrain from
opening up new establishments. Stagnant
establishment figures further entrench
the industry in its mature phase.
Stable products
The industrys well-established products
and clearly segmented product groups are
also indicative of a mature industry.
According to the Risk Management
Associations annual study of industry
players and IBISWorld estimates, only
about 1.2% of industry revenue is
depreciated annually. This figure reflects a
low level of industry investment in new
machinery. Low US investment partly
stems from the growing presence of
manufacturers located in other countries,
some of which are either owned by or
manufacture for US companies. However,
the growing demand for products that
facilitate energy efficiency and security has
been promoting innovation in recent
years. Growth prospects over the five
years through 2017 are expected to spur
further investment.
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Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

23493
Heavy Industrial Facilities Construction in the US

The Electrical Equipment Manufacturing industry supplies inputs for the manufacture of
goods, such as lights and industrial motors.
33312
Construction Machinery Manufacturing in the US

construction machinery, such as cement mixers and electric power tools like saws and drills.
33329a
Semiconductor Machinery Manufacturing in the US

industrial electric equipment, including generators, industrial machines and electric belts.
33329b
Printing, Paper, Food, Textile & Other Machinery Manufacturing in the US
industrial electric equipment, including generators, industrial machines and electric belts.
33361a
Engine & Turbine Manufacturing in the US

The Electrical Equipment Manufacturing industry supplies inputs for the manufacture of goods
in this industry.
33361b
Wind Turbine Manufacturing in the US

in this industry.
33399
Power Tools & Other General Purpose Machinery Manufacturing in the US
machinery products including consumer electric goods, such as air conditioners, heating
systems, kitchen appliances, washing machines and lawn mowers.
42369
Electronic Part & Equipment Wholesaling in the US

in this industry.
KEY SELLING INDUSTRIES

33111
Iron & Steel Manufacturing in the US

The Electrical Equipment Manufacturing industry purchases components for the manufacture
of industry products.
33261
Wire & Spring Manufacturing in the US

The Electrical Equipment Manufacturing industry uses springs and wires in the manufacture of
industry goods.
33272
Screw, Nut & Bolt Manufacturing in the US

The Electrical Equipment Manufacturing industry purchases screws, nuts and bolts for the
manufacture of industry products.
33351
Metalworking Machinery Manufacturing in the US

The Electrical Equipment Manufacturing industry purchases metal working machinery to assist
in assembly of industry products.
42351
Metal Wholesaling in the US

The Electrical Equipment Manufacturing industry purchases metal from wholesalers to make
industry products.
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Products & Markets
Products & Services
Products and services segmentation (2012)
16.5%
Transformers
32%
Motors and
generators
25.5%
Switches
Total $39.3bn
Generators
Electrical generators (or dynamos)
convert mechanical motion into electrical
energy. Concerns about the security of
electricity supplies from utilities can
boost demand for generators. Also,
replacement of less-efficient generators
boosts industry revenue. In 2008 and
2009, a downturn in economy-wide
capital spending and industrial
production activity along with a decrease
in factory capacity utilization negatively
impacted generator sales. In 2010 and
2011, economy-wide capital spending and
industrial production activity were weak
but are expected to improve in 2012,
returning this segments share of industry
revenue to levels seen pre-recession.
Electric motors are used in a range of
products that require electricity to be
converted into mechanical motion,
including in consumer appliances and
products used by processing industries.
Growth in consumer spending and
industrial production activity drove
demand for electric motors through
2007, and higher energy prices also
promoted spending on more efficient
motors. The economic downturn in the
United States, along with lower energy
prices in late 2008 and 2009, negatively
influenced motor sales in those years.
26%
Relays and
industrial controls
Motor and generator manufacturing is

expected to account for 32.0% of the
value of industry shipments in 2012. This
segment is stagnating as a share of
revenue because, although global
demand for these products is not as
strong as other industry segments, more
of this segments demand will be fulfilled
by domestic manufacturers. This is
because such products are heavier than
many others produced by this industry,
making them more costly to transport
and decreasing the rates of offshoring
and outsourcing motor and generator
manufacturing abroad. Establishments
that predominantly manufacture
turbines, engines and equipment used for
power transmission, such as electric
power generators, are classified in the
Engine, Turbine and Power Transmission
Equipment Manufacturing industry
(IBISWorld report 33361).
Switches
Demand for switchgear equipment, a
type of equipment that directs
electricity from one source to another
and protects the integrity of the power
system, is influenced by a myriad of
factors. Some demand determinants for
this segment include spending on
transmission-network substations and
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Products & Markets
Products & Services

continued
the level of building construction and

renovation activity.
Sales of switchgear and switchboard
apparatus are expected to account for
25.5% of the value of industry revenue in
2012, down from 27.0% in 2007 partly
because of an increase in import
penetration. Switchgear is a general term
covering switching and interrupting
devices and their combination with
associated control, metering, protective
and regulating devices that are used
primarily in connection with the
generation, transmission, distribution
and conversion of electric power. A
switchboard is comprised of one or more
panels that accommodate control
switches, indicators and other apparatus
for operating electric circuits.
Relays and industrial controls
Relay and industrial control products
are predominantly used for automation
and optimization of industrial and
commercial processes. Therefore,
growth in industrial production
primarily drives demand for these
products. Such products are also used
in buildings for automating
temperature, doors and restrooms.
Over the past five years, there have
been declines in private non-residential
construction and housing starts,
hindering demand for this segment.
Relay and industrial control
manufacturing is expected to account for
26.0% of the value of industry shipments
in 2012, which declined in part due to an
increase in import penetration and weak
levels of industrial production. A relay is
a switch that is used to open or close a
circuit. Most industrial controls are
essentially switches, but of a more
complex nature.
Transformers
Power, distribution and specialty
transformer products are mainly highand medium-voltage products that are
used to transmit and distribute
electricity. End users of these products
are predominantly power utilities and
power transmission companies.
Transformers are used to increase
voltage for long-distance commercial
distribution and reduce voltage for
distribution at the local end for
distribution to end-users. IBISWorld
estimates relatively strong growth in this
segment in 2007 through 2012, due in
part to growth in demand arising from
transmission network modernization.
Demand for these products depends
on growth in demand for and supply of
electricity, which is directly correlated
to economic growth. Demand is also
determined by the electricity
generation industrys profitability and
capital spending, the age of existing
infrastructure and demand for reliable
electricity supplies. Likewise, demand
for and investment in renewable
energy can boost industry revenue.
Power, distribution and specialty
transformer manufacturing is expected
to account for 16.5% of the value of
industry shipments in 2012. This
segment is growing as a share of
revenue partly because such products
are heavier than many others
produced by this industry, making
them more costly to transport and
decreasing the rates of offshoring and
outsourcing transformer
manufacturing abroad. As a result, this
segment is expected to grow faster
other segments in the industry and
will account for a larger share of
industry revenue in 2017.
WWW.IBISWORLD.COM
Products & Markets
Demand
Determinants
Major Markets
Major overriding factors driving demand

for electrical equipment include the
following: growth in demand for
electricity; the rising cost of energy and
electricity; per capita disposable income;
and the need for secure power. In
addition, government laws, regulations
and policies impact demand for industry
products. For example, the US Energy
Efficiency Act of 2005 requires the
Federal Energy Regulatory Commission
reduces the tax life of transmission assets
(refer to Industry Assistance for
additional information of the US Energy
Efficiency Act of 2005).
The importance of the above drivers of
demand and other determinants of
demand for electrical equipment can vary
by electrical product. Every product in
this industry is affected by per capita
disposable income (which has dipped and
recovered over the five years to 2012)
because downstream industries that
purchase industry products only demand

as much product as can satisfy their
consumer demand.
Demand for motor and generator
products is fueled by economic growth,
consumer spending and industrial
production. Demand for switchgear
equipment is impacted by spending on
transmission network substations and by
building construction and renovation
activity. Demand for switchboard
apparatus is impacted by building
construction and industrial production.
Relay and industrial control products
are used for automation and optimization
of industrial and commercial processes,
and demand for these products is
primarily driven by growth in industrial
production (automation solutions) and
building construction (e.g. controls for
automating and regulating heating,
ventilation and air conditioning, and
electricity and lighting).
Major market segmentation (2012)
7%
Retailers
35%
27%
Downstream
manufacturers
Total $39.3bn
Wholesalers and utilities
The major market segments for this
industry include utilities, which are
expected to constitute about 35.0% of
the industrys revenue in 2012, and
wholesalers, which are estimated to
Utilities
31%
Wholesalers
make up about 31.0% of industry

revenue over the year. The proportion
of industry revenue that is made
through wholesalers has declined over
the past few years due to wholesale
bypass, the process by which
WWW.IBISWORLD.COM
Products & Markets
Major Markets
continued
manufacturers sell directly to

consumers or retailers.
Wholesale bypass increased markedly
over the five years to 2012 due to online
systems development that facilitated
communications between manufacturers
and consumers, especially larger entities
like utilities. It is more likely that
companies in this industry will transact
directly with end users when the
company is large, transaction values are
high and supply is part of a turnkey
project or for ongoing service contracts.
For example, Schneider Electric, which
does not address the electricity
generation or the high-voltage electrical
distribution markets, stated that in 2011
electrical distributors accounted for
about 50.0% of the companys total
sales. The utilities market has
experienced growth due to increased
demand from energy infrastructure
customers. As a result of increasing
utility demand, the utilities segment is
expected to account for a larger share of
industry revenue in 2017.
Downstream manufacturers
Another market includes downstream
manufacturers, accounting for 27.0% of
industry revenue. This market segment
has experienced revenue decline over the
past few years, mostly due to the
recession, but is slowly rebounding as
economic conditions affecting demand
improve. When consumers have less

disposable income and feel hesitant
about the economy, they purchase fewer
products, including electronic equipment.
Equipment sold to consumers at the
retail level usually is tinkered with by
more than one manufacturer. As a result,
consumers purchased fewer electronics at
the retail level over the past five years,
which in turn decreased demand from
upstream manufacturers for products
manufactured by the industry.
Accordingly, the downstream
manufacturing segment suffered and lost
market share in the five years to 2012.
Retailers
Retailers are estimated to make up the
remaining 7.0% of industry revenue in
2012. This segment has risen slightly
over the past five years as a result of
wholesale bypass. With each year that
goes by, manufacturers make
purchasing their products easier by
implementing or upgrading internet
sales methods, enhancing their
customer support team and advertising
attractive prices. As the purchase
process becomes easier and prices
continue to be lower than wholesalers,
retailers will transact directly with the
manufacturer, skipping the wholesaler.
Consequently, this segment is expected
to account for a larger share of industry
revenue in 2017 at 9.0%.
WWW.IBISWORLD.COM
Products & Markets
Level & Trend

xports in the
E
industry are High

and Decreasing
Imports
in the
industry are High
and Increasing
Imports
Imports for consumption of industry
products are expected to be valued at
$25.6 billion in 2012, up 8.4% from
2011. The value of imports is expected to
increase at an annualized rate of 2.8% in
the five years through 2012. Imports are
forecast to account for 49.8% of
domestic demand in 2012, compared
with 40.7% in 2007. Import penetration
varies by product segment, but is on an
overarching upward trend in the
industry largely due to production
moving overseas to take advantage of
cheaper labor.
According to the US International
Trade Commission and IBISWorld
estimates, the major sources of US
imports for consumption in 2012 are
Mexico (30.6%), China (16.6%),
Japan (7.9%) and Germany (6.3%).
China is becoming a more important
source of industry products
imported into the United States,
Exports To...
Industry trade balance

30000
20000
10000
0
$ million
International Trade
10000
20000
30000
40000
50000
Year 04
Exports
06
08
10
Imports
12
14
16
18
Balance
with growth in Chinese imports

particularly strong in transformers
and industrial controls.
Exports
Exports of industry products are
expected to value $13.5 billion in 2012,
up 6.6% from 2011. The value of exports
Imports From...
7%
Germany
9%
Japan
4%
6% Germany
China
Mexico
49%
Other
20%
Canada
33%
18%
China
22%
Mexico
Year: 2011
SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA
Total $13.5bn
33%
Other
Total $25.6bn
SOURCE: USITC
WWW.IBISWORLD.COM
Products & Markets
International Trade
continued
of industry products is expected to

decline at an annualized rate of 0.3% in
the five years to 2012. Exports are
forecast to represent 34.4% of the value

of industry shipments in 2012, compared
with 29.7% in 2007.
WWW.IBISWORLD.COM
Products & Markets

Business Locations 2012
West
New
England
AK
0.1
Great
Lakes
WA
ND
MT
1.7
Rocky
Mountains
ID
OR
1.2
West NV
0.6
3.0
SD
0.3
WY
0.4
MN
0.1
0.1
Plains
0.8
UT
CO
0.5
KY
0.9
OK
1.3
NC
2.8
TN
AZ
NM
1.0
0.5
Southwest
TX
6.5
HI
0.0
AdditionalStates(as marked on map)

1 VT
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.2
2.7
0.7
3.4
2.5
0.3
SC
Southeast
1.0
MS
AL
1.2
1.7
GA
2.0
1.0
LA
1.2
FL
3.2
Establishments(%)
0.0
0.7
AR
0.7
1.7
9.9
WV VA
2.4
1.2
2.5
CA
West
6.6
MO
KS
1.7
OH
2.9
5.0
IN
6.4
0.5
PA
4.4
IL
0.3
1 2
3
NY
5.4
5 4
MI
4.4
IA
NE
0.1
WI
ME
MidAtlantic
9 DC
0.0
Lessthan3%
3%tolessthan10%
10%tolessthan20%
20%ormore
WWW.IBISWORLD.COM
Products & Markets
Establishments vs. population

30
20
10
Southwest
Southeast
Rocky Mountains
Plains
New England
Mid-Atlantic
Great Lakes
0
West
Proximity to complementary and

secondary manufacturing facilities,
including the engine machinery,
construction machinery, steel
manufacturing and aluminum
manufacturing industries, influences the
distribution of electrical equipment
manufacturing establishments. A vast
majority of electrical equipment
manufacturers are clustered close to each
other, allowing for easier access to new
technological innovations.
About half of manufacturers in this
industry can be found in the Great Lakes
and Southeast regions, which each
account for 24.8% and 20.2% of
industry establishments, respectively.
The Great Lakes region accounts for an
estimated 28.8% of employment, while
the Southeast region accounts for
30.2%. California has the largest share
of establishments at 9.9% largely due to
its proximity to top tier engineering
Business Locations
Establishments
Population
schools and resulting high supply of

qualified workers.
WWW.IBISWORLD.COM
23
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks

Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration
in
this industry is Low
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
The four largest companies in this

industry are expected to account for
about 29.6% of industry revenue in 2012.
This number has increased from 19.7% in
2007 due to a myriad of factors, but
mostly because of acquisitions. Because
the market share concentration of the
industry is rising, the industry is likely to
be in a mature phase of its life cycle.
Most of the largest players in the
industry have significant offshore
production facilities and their total US
sales can exceed the value of shipments
from US production facilities. However,
there has been consolidation in the North
American electric motor sector, with an
estimated four competitors in 2012

compared with five competitors in 2008
and eight competitors in 2000. In early
2007, Schneider Electric acquired
American Power Conversion (APC), a
provider of uninterruptible power supply
systems, for about $6.1 billion. Similarly,
Eaton Corporation has acquired several
small companies over the past five years,
adding an estimated $2.0 billion to
annual revenue in 2012, more than
doubling its market share. While there
are large numbers of small players in the
industry specializing in niche products
and markets, major players in the
industry are expected to slowly gain a
larger role in the market.
Business expertise of operators

Good management within the company
allows participants to focus on their
strengths and, therefore, benefits the
companys bottom line.
Effective quality control

Customers purchase this industrys goods
solely based on product performance and
quality, thus, it is important that
production of electrical equipment meets
required quality standards.
Access to the latest available and most

efficient technology and techniques
Access and adoption of technological
developments keeps participants up-todate with product trends.
Access to high quality inputs
Players save on costs with access to
high-quality raw materials at
competitive prices.
Cost Structure
Benchmarks
Profit
Profit returns, which can be volatile due
to fluctuating revenue, vary by segment.
On average, IBISWorld estimates that
earnings before interest and taxes for
the industry will equal 5.8% in 2012, up
from 4.2% in 2007. Local manufacturers
have been under pressure to increase
efficiencies and productivity, largely due
Having links with suppliers

Established relations with distributors
and suppliers are a key success factor.
Economies of scale
Large-scale operations are generally
more cost effective and profitable as they
achieve economies of scale.
to competition from equipment

imported from low-cost countries. In
fact, imports as a share of domestic
demand are expected to increase from
40.7% in 2007 to about 49.8% in 2012.
This has forced some operators to
offshore less profitable operations,
resulting in higher profitability for
thisindustry.
WWW.IBISWORLD.COM
24
Cost of materials
The cost of materials is the Electrical
Equipment Manufacturing industry
largest expense item, and is expected to
account for 58.7% of industry revenue in
2012. Materials include steel, copper,
aluminum, silver, nickel, zinc, mineral oil
and plastics (the cost of which can be
volatile). In addition, industry players
purchase fabricated products and
electronic components. IBISWorld
estimates a rise in the price of raw
materials in the five years to 2012 will be
largely offset by the industrys pricing
actions. The price of raw materials fell in
2009, but then increased in 2010 and
2011. 2012 prices are expected to vary by
input, with plastic prices forecast to rise
while the price of steel falls.
Wages
Employee compensation (including
payroll, fringe benefits and payments for
contract labor) is the next largest expense
item, accounting for an estimated 13.5%
of revenue in 2012 (down from 15.5% in
2007). Labor is used to assist in the
manufacturing process, packing,
distribution, administration, sales,
research and development, IT,
management, and other human activities.
Other costs
Other costs are typically a constant share
of industry revenue, and account for
about 18.3%. Uncategorized items in the
cost structure include administrative and
distribution costs. An additional 0.8% is
estimated to be spent on marketing costs.
Sectorvs.IndustryCosts
AverageCostsof
allIndustriesin
sector(2012)
IndustryCosts
(2012)
9.2
5.8
10.6
13.5
60.4
58.7
100
80
Percentage of revenue
Cost Structure
Benchmarks
continued
60
Profit
Wages
Purchases
Depreciation
Marketing
Rent&Utilities
Other
40
20
2.9
3.1 2.0
11.8
1.2 1.7 0.8

18.3
WWW.IBISWORLD.COM
25
Basis of Competition
Level & Trend
ompetition
C
in
this industry is
Medium and the
trend is Steady
The major bases of competition are as

follows: product quality and
performance; the range of products and
services offered; foreign competition, and
price (although performance
characteristics can reduce the importance
of selling price as a competitive factor).
The ability to provide high-performing
and reliable electrical equipment is
important given the nature of some
customers and end users who, in turn,
seek to provide highly reliable products
and services. In addition, customers
often wish to minimize replacement,
repair and maintenance expenditures.
Internal
Companies that are able to supply
equipment that offers users with
increased utility and lower operating
costs will often have a competitive edge.
Research and development and strategic
alliances can assist in gaining access to
competitive products, as well as to
production technologies (which may help
reduce production costs).
The ability to offer a broad range of
products and services can help provide
customers with a total solution and can
sometimes result in complementary
sales. Cooper Industries Ltds 2011
annual report stated that its reputation
as a manufacturer of a broad line of
quality products and premier brands is
an important factor in its business.
The provision of turnkey solutions,
ongoing maintenance and services
appears to be particularly important in

the power generator, transmission
equipment and electric controls markets.
There can also be opportunities to
capitalize on products that have well
known and respected brand names.
External
Domestic competition with foreign
manufacturers of industry products is
heating up. In fact, the level of imports
satisfying domestic demand is expected
to rise to 49.8% in 2012, up from 40.7%
in 2007. The economic slump of 2008
and 2009 forced industry patrons
(consumers, construction companies and
manufacturers) to cut costs. Downstream
enterprises reduced employment figures,
some sought out the cheapest goods
possible (oftentimes from overseas
manufacturers) and some executed both
measures. Industry operators are now
increasingly facing the realities of price
competition from manufacturers abroad,
and have followed similar suit of
downstream industries and cut
employment figures. In fact, average
employment per establishment has fallen
from 57 in 2007 to 49 in 2012.
Furthermore, industry operators are
setting up manufacturing facilities
abroad in an effort to capture additional
price-conscious demand. It is important
to note that, while these operations may
help generate additional company
revenue, operations abroad are not
counted in industry revenue.
WWW.IBISWORLD.COM
26
in this industry are

Medium and Steady
Industry
Globalization
Level & Trend
lobalization
G
in
this industry is
High and the trend
is Increasing
International trade is a
major determinant of
an industrys level of
globalization.
Exports offer growth
opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.
The Electrical Equipment Manufacturing

industry has a high level of globalization,
as many of the major players in this US
industry are either foreign-owned
companies (e.g. ABB, Schneider Electric,
Siemens and Areva) or US-owned
companies with significant non-US sales
and non-US manufacturing capacity.
Globalization has increased in this
industry due largely to the following:
cross-border takeovers (often foreign
takeovers of US companies) and joint
TradeGlobalization
200
Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
150
Electrical
Equipment
Manufacturing
50
Import
40
Medium
Low
Mature
Low
Medium
Medium
Medium
also increase negotiating power in

purchasing raw materials (which is a
significant cost). As a result, the
barriers to entry in this industry are
considered medium and steady.
ventures; growing global demand for

industry products (particularly in the
Asia Pacific); the establishment by
existing companies of manufacturing
operations in low-wage cost countries;
and the outsourcing production to third
parties in low-wage cost countries.
Imports are expected to increase at an
annualized rate of 2.8% in the five years
to 2012 and continue rising into the next
five years at an average annual rate of
9.4%. Although exports have remained
Global
100
Level
GoingGlobal:ElectricalEquipment
Manufacturing2000-2012
Export
0 Local
0
BarrierstoEntrychecklist
80
120
Imports/DomesticDemand
200 Export
Exports/Revenue
Level & Trend

arriers to Entry
B
The major barriers to entry for this

industry include the following: access to
the latest technology, which can be
costly; access to skilled employees, which
can be scarce; establishing a reputation;
and reaching critical mass.
The largest players in this industry
have global operations, established
production facilities and distribution
arrangements, internally developed
and acquired technologies (which can
be very expensive to acquire at the
outset), a large range of products and
well-known brand names. Established
large firms can have relatively low unit
costs (in production as well as in
research and development). Scale can
Exports/Revenue
Barriers to Entry
160
Global
150
100
50
2000 2012
0 Local
0
Import
40
80
120
160
Imports/DomesticDemand
WWW.IBISWORLD.COM
Industry
Globalization
continued
relatively stagnant, expected to decline

at an annualized 0.3% in the five years to
2012, they are forecast to rise by 7.9% in
the next five years, indicating increasing
global interdependence.
Schneider Electric, a French
company, has acquired a number of
US companies including American
Power Conversion, which was
acquired in February 2007 for about
$6.1 billion. Eaton Corporation,
headquartered in the United States,
has manufacturing facilities inside and
outside the United States. In January
2011, the US-based Eaton Corporation

acquired Baldor Electric, a leader in
North American power motors
manufacturing, for $4.2 billion.
Cooper Industries Ltds Electrical
Products segment has production
facilities in the United States, Europe,
Mexico and China. When announcing
the formation of a switchgear joint
venture in China in October 2007,
Cooper (which recently became an Irish
company) stated that globalization
remains a key strategic initiative and
growth opportunity for Cooper.
27
WWW.IBISWORLD.COM
Major Companies
General Electric Company | Eaton Corporation
ABB Ltd. | Other Companies
Major players
(Market share)
Eaton Corporation 10.4%
72.9%
Other
ABB Ltd. 5.8%

General Electric Company 10.9%
Player Performance
General Electric
Company
Market share: 10.9%
Industry Brand Names
GE Industrial Products
and Systems
GE Power Systems
General Electric (GE) is highly

diversified. The company manufactures
aircraft engines, transportation
equipment, home appliances, lighting,
electric distribution and control
equipment, generators and turbines,
nuclear reactors and medical
imagingequipment. GE also runs a
financial services division, unrelated to
this industry.
Segments that manufacture products
relevant to the Electrical Equipment
Manufacturing industry include
technology and infrastructure, the
consumer and industrial segment and
energy infrastructure. The technology
infrastructure segment produces and
sells a range of products and services,
including those related to aviation,
transportation and enterprise solutions.
The consumer and industrial segment
manufactures and supplies products that
include appliances, lighting and

electrical equipment; and control
products include lighting and power
panels, switchgear and circuit breakers.
Meanwhile, GEs energy infrastructure
segment produces products and services
related to power plant, water treatment
and oil and gas drilling and production
systems (turbine and power transmission
equipment are classified in the Engine,
Turbine and Power Transmission
Equipment Manufacturing industry,
IBISWorld report 33361).
GEs electrical distribution and control
products include transformers, meters,
relays, circuit breakers, panel boards and
general-purpose controls that are used to
distribute and manage power in a variety
of residential, commercial, consumer and
industrial applications. The company also
produces motors and control systems
used in industrial and consumer
GeneralElectricCompany(USelectricalequipmentmanufacturing
segment)financialperformance*
Year
Revenue
($ million)
(% change)
NetIncome
($ million)
(% change)
2007
3,262
21.0
490
37.6
2008
4,031
23.6
608
24.1
2009
3,782
-6.2
661
8.7
2010
3,522
-6.9
683
3.3
2011
3,842
9.1
590
-13.6
2012
4,277
11.3
511
-13.4
*Estimates
SOURCE: IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Player Performance
Eaton Corporation
Market share: 10.4%
products, such as heating ventilation and

air conditioning, dishwashers and clothes
washers and dryers.
Financial performance
GEs consolidated revenue is expected to
total $153.2 billion in 2012, up from
$147.3 in 2011. At the end of 2011, the
group had about 287,000 employees,
with about 133,000 employees in the
United States. Because GE operates on a
global scale, revenue from customers in

the United States accounted for only
about 47.0% of GEs total revenue. Also
at the end of the year, GE had about 408
manufacturing plants worldwide,
including 231 facilities in the United
States and Puerto Rico. Over the five
years to 2012, IBISWorld expects GEs
industry-specific revenue to grow at an
average annual 5.6% per year, including
an 11.3% jump in 2012, to $4.3 billion.
Eaton Corporation, headquartered in

Cleveland, is a diversified industrial
manufacturer. The company
manufactures and sells electrical systems
and components for power quality,
distribution and control; fluid power
systems and services; mobile and aircraft
equipment; truck drivetrain systems; and
automotive engine air management
systems, powertrain solutions and
specialty controls. In 2011, Eaton had
about 73,000 employees in more than 50
countries and sold products to customers
in more than 150 countries.
Products of the electrical segment
include low- and medium-voltage power
distribution products; circuit breakers,
assemblies and components used in
managing distribution of electricity to

industrial, utility, light commercial,
residential and OEM markets; drives,
contactors, starters, power factor and
harmonic correction; sensors; motor
control products used in the control and
protection of electrical power
distribution systems; AC and DC
uninterruptible power supply (UPS)
systems; and power management
software. The principal markets for the
electrical segment are industrial,
construction, commercial, automotive
and government customers. The United
States is expected to account for about
78.9% of the companys sales in 2012.
Eaton has been on an acquisition
spree. The most notable industry-related
EatonCorporation(USelectricalequipmentmanufacturingsegment)
financialperformance*
Year
Sales
($ million)
(% change)
OperatingIncome
($ million)
2007
3,057
0.3
416
6.4
2008
3,157
3.3
495
19.0
2009
2,680
-15.1
407
-17.8
2010
2,889
7.8
416
2.2
2011
3,401
17.7
510
22.6
2012*
4,066
19.6
626
22.7
(% change)
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Player Performance
ABB Ltd.
Market share: 5.8%
Industry Brand Names
ABB Inc.
instance took place in 2011, when the

company acquired the E.A. Pedersen
Company, which generated $37.0
million in that year. E.A. Pedersen
manufactures, among other products,
switchgear and power and relay control
panels. In 2010, Eaton acquired:
Chloride Phoenixtec Electronics, a
China-based manufacturer of UPS
systems, which generated $25.0 million
for Eatons consolidated revenue in the
year; CopperLogic Inc., a US
manufacturer of electrical and
electromechanical systems, which
generated $35.0 million for Eaton; and
Wright Line Holding Inc., a US provider
of customized enclosures, rack systems
and air-flow management systems to
store, power and secure mission-critical
information technology (IT) data center
electronics, which generated $101.0
million for Eaton. The company made
two acquisitions in 2009, which
generated combined sales of $43.0
million. In 2008, the acquisitions of The
Moeller Group (a Europe-based supplier
of components for building applications,

and industrial controls) and Phoenixtec
Power Company Ltd (a Taiwan-based
UPS manufacturer), were completed in
the first quarter of 2008, adding $1.9
billion of sales in 2008.
Sweden-based ABB Ltd. is an industrial

company composed of five core
divisions. In August 2008, ABB acquired
Kuhlman Electric Corporation, a USbased transformer company, for about
$520.0 million. The acquisition was
integrated into the power products
division in North America.
The power products division
manufactures three categories of
products: medium-voltage products,
high-voltage products, and
transformers. Products include
switchgear, breakers, transformers,
fuses, contractors and sensors. Principal
customers are utilities and operators of
power transmission systems and power
generating plants. The companys power
systems division offers turnkey systems
for power transmission and distribution
grids and for power plants that

incorporate both internally
manufactured components and thirdparty manufactured components. Both
of these divisions contribute to industry
segment revenue.
ABB has reorganized to operate under
a central management structure in an
attempt to cut company debt
accumulated from asbestos liability
charges, underperforming operations
and a plummeting stock price. ABB has
shifted production to emerging
countries, which more than 45.0% of
manufacturing employees located in
low-cost, offshore locations. In North
America, there has been a focus on
replacing aged infrastructure assets.
Demand for automation products grew
as many industrial customers increased
Eatons electrical equipment
manufacturing segment is expected to
grow at an annualized 5.9% in the five
years to 2012, largely due to acquisitions.
Further, rising disposable income and
consumer confidence are prompting
consumers to purchase electrical
equipment that requires industry
products. At the same time, the
resurgence of infrastructure expansion is
also driving demand for industry
products. Revenue for this segment is
anticipated to increase 19.6% in 2012 to
$4.1 billion. Segment operating profit is
also expected to improve, reaching 15.4%
of revenue in 2012, up from 13.6% in
2007, due to sales growth, productivity
gains and acquisitions.
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
their investments in efficiency

improvements due to higher raw
material and energy costs.
2012 to $2.3 billion. Margins expanded

from 18.1% in 2007 to an estimated
19.7% in 2012 due mainly to rapid
consumer acceptance of new product
introductions and successful cost control
measures. The companys Americas
segment is expected to account for 20.7%
of company revenue in 2012, up from
19.7% of revenue at the end of 2010.
IBISWorld expects ABBs industryrelevant revenue to grow at an
annualized rate of 3.9% over the five
years to 2012, with a 6.6% increase in
ABBLtd.(USelectricalequipmentmanufacturingsegment)
financialperformance*
Year
Revenue
($ million)
(% change)
EBIT
($ million)
(% change)
2007
1,879
28.3
340
61.1
2008
2,217
18.0
380
11.8
2009
1,914
-13.7
290
-23.7
2010
2,056
7.4
331
14.1
2011
2,136
3.9
385
16.3
2012
2,277
6.6
448
16.4
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
Other Companies
Siemens Aktiengesellschaft
Estimated market share: 2.5%

Siemens is Europes largest electronics
and electrical engineering company,
with worldwide operations in the
industrial automation and control,
information and communications,
lighting, medical, power transmission
and transportation sectors. For fiscal
2011 (year end September 30), Siemens
is expected to have generated net sales
of about $102.6 billion.
The companys US subsidiaries are

estimated to have accounted for about
18.0% of revenue in 2012. Segment
revenue is expected to total $983.8
million in 2012, up 6.3% from 2011;
however, the five-year growth rate lagged
at an average annual 1.0% increase due to
two consecutive plummets in revenue in
2008 and 2009. Likewise, the company
is expected to earn relatively low profit in
this sector, at an estimated 10.4% of 2012
revenue, up 5.2% from 2011.
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is Low
This industry requires relatively low

levels of capital investment. For every
unit the average firm in this industry
spends on labor, it also spends about
0.09 units on capital (defined as
depreciation in the cost structure
benchmarks section).
Capital expenditure is low in this
industry when expressed as a percentage
of revenue (an estimated 1.2%), relative
to the average of all manufacturing
industries (an estimated 2.5%). Capital
expenditures fell in this industry in
recent years due to a consolidation of
plants and a shift in production capacity
to low-cost countries.
Labor costs are high in this industry
compared to other manufacturers,
accounting for an estimated 13.5% of
Capital intensity
Capital units per labor unit

0.5
0.4
0.3
0.2
0.1
0.0
Economy
Manufacturing
Electrical
Equipment
Manufacturing
Dotted line shows a high level of capital intensity

revenue. This industry requires relatively

unskilled labor, which pulls down
average wage costs. High levels of labor
ToolsoftheTrade:GrowthStrategiesforSuccess
InvestmentEconomy
Recreation,PersonalServices,
HealthandEducation. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information,Communications,
Mining,FinanceandReal
Estate.To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
TraditionalServiceEconomy
WholesaleandRetail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Engine&Turbine WindTurbine
Heavy
Industrial Manufacturing Manufacturing
Construction
Facilities
Construction
Iron&Steel Machinery
Manufacturing Manufacturing
Electrical
Equipment
Manufacturing
ChangeinShareoftheEconomy
CapitalIntensive
LaborIntensive
NewAgeEconomy
OldEconomy
AgricultureandManufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
WWW.IBISWORLD.COM
Capital Intensity
continued
input, however, make this US industry

susceptible to competition from products
imported from countries where wages are
lower. The industry has been addressing

this threat through productivity and
efficiency improvements.
Technology
& Systems
Product innovations in this industry

have generally been to promote the
delivery and use of electricity in a
reliable, cost-effective and energyefficient manner. ABB Ltd stated in
mid-2009 that energy efficiency is a
primary purchase criteria for its
products, and that about 45.0% of the
companys 2008 revenue was generated
from demand for energy efficiency.
Innovations in thyristors, valves and
heat dissipation enable more efficient
long-distance power transmission and
enable integration of renewable energy
generation capacity. Improvements in
components are increasing the efficiency
of electric motors. Governments are
promoting moves toward a smart grid,
which will result in the development of
products that enhance and automate the
monitoring and control of electrical
distribution, thus saving energy,
reducing costs and increasing reliability
and transparency.
In the United States, the average age of
a substation transformer is about 42
years two years longer than its expected
life span. To improve the operating
efficiency of transformers, manufacturers

have begun to use an alternative material
to the conventional silicon steel used in
transformer cores. Cores made of
crystalline silicon are subject to power
losses during magnetization and
demagnetization (hysteresis).
Transformer cores made of metallic glass
alloys however exhibit very low hysteresis
and are therefore able to reduce core
energy losses by up to 80.0%. In
addition, the energy that would be lost
when using a silicone core would be
converted to heat which would also add
to wear and tear of the transformer.
Metallic glass alloy transformer cores
emit less heat due to reduced energy
losses and as a result the life of the
transformer is lengthened and the
quantity of insulation needed for safe
transformer operation is reduced.
New manufacturing technologies have
reduced the cost of manufacturing
electrical equipment. These costs savings
are eventually passed onto the consumer
through lower prices. New technologies
also assist participants to differentiate
products via the use of new materials.
The industry has been highly volatile over

the past five years, with annual changes
in revenue ranging from a decline of
24.5% in 2009 to an increase of 11.3% in
2007. These growth patterns average a
13.5% revenue fluctuation per year in the
five years to 2012. This industry is
sensitive to the economic cycle and, in
some segments, building and
construction activity. Changes in

government laws, regulations and
policies are also important. The industry
has also been confronted with rising
competition from imports. The value of
total US imports of electrical equipment
is expected to increase at an annualized
rate of 2.8% in the five years to 2012,
even with a large fall in 2009.
Level
The level
of
Technology Change
is Medium
Revenue Volatility
Level
The level
of
Volatility is High
WWW.IBISWORLD.COM
A higher level of revenue

volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
VolatilityvsGrowth
1000
Revenuevolatility*(%)
Revenue Volatility
continued
Hazardous
Rollercoaster
100
10
ElectricalEquipment
Manufacturing
1
0.1
Stagnant
30
10
BlueChip
10
30
50
70
Fiveyearannualizedrevenuegrowth(%)
* Axis is in logarithmic scale
Regulation & Policy

Level & Trend
he level of
T
Regulation is
Medium and the
trend is Steady
Industry Assistance
Level & Trend
he level of Industry
T
Assistance is
Medium and the
trend is Steady
The main laws and regulations that

directly affect industry participants are
environmental laws. In addition,
government laws, regulations and
policies can promote standards set by
certain bodies. For example, the US
Energy Efficiency Act of 2005: provides
mandatory and enforceable
transmission reliability standards; and
contains energy efficiency standards for
new products; and promotes standards
for devices utilizing stand-by power. The
US Energy Independence and Security
Act passed in December 2007

supplements the Energy Bill; and,
among other things, mandates
renewable fuel standards and energy
equipment standards, and encourages
development and investment funds to
invest in intelligent electric network
technologies. Standard setting bodies
relevant to this industry in the United
States include the National Electronic
Manufacturers Association,
Underwriters Laboratory and American
National Standards Institute.
Tariffs provide assistance to the industry

by creating a barrier on imported goods
by increasing their cost. This makes the
goods less favorable compared to
domestically produced goods (when they
are of equal quality) and therefore
benefits domestic production of industry
products. Tariffs vary depending on the
material used to manufacture products in
this industry as well as the output of
various products. For example,
synchronous motors with an output not
exceeding 37.5w are subject to a 7.4%
tariff while universal AC/DC motors are
subject to a 3.5% tariff, provided they do

not exceed an output of 74.6w. Universal
AC/DC motors exceeding 74.6w but not
exceeding 735w are subject to a 4.2%
tariff. If they exceed 735w but do not
exceed 746w they are subject to a 3.6%
tariff. Liquid dielectric transformers are
subject to a 1.0% tariff while transformers
that are to be used in automatic data
processing machines are not subject to
any tariff. Switchgear for a current not
exceeding 11 amps is subject to a 1.9%
tariff while anything greater than 11 amps
is subject to a 3.2% tariff.
WWW.IBISWORLD.COM
Industry Assistance
continued
Government laws, regulations and

policies that promote energy efficiency
promote demand for industry products,
and therefore is a form of assistance.
The US Energy Efficiency Act of 2005:
requires the Federal Energy Regulatory
Commission to issue a rule on incentive
and performance-based rates for
transmission investment; reduces the
tax life of transmission assets; provides
mandatory and enforceable
transmission reliability standards;
contains energy efficiency standards for
new products; promotes standards for
devices utilizing stand-by power;
promotes energy efficiency in new and
existing buildings (such as through
stipulating standards and providing
depreciation benefits); authorizes the
federal government to make grants to
state and local governments to improve
energy efficiency.
The US Energy Independence and
Security Act passed in December 2007
supplemented the US Energy Efficiency
Act of 2005. The 2007 Act mandates,
among other things, renewable fuel
standards and energy equipment
standards, and encourages development
Keytariffs
Goods
Electric motors and generators
Electric transformers
Switchgear and switchboards
Relays
Power distributors
Lowrate Highrate
0.0
0.0
1.9
2.7
2.6
7.4
6.6
3.2
2.7
2.6
SOURCE: USITC
and investment funds to invest in

intelligent electric network technologies.
Implementation of a new federal carbon
policy would increase the cost and
change the mix of new generation
capacity, which would also impact
transmission investments.
The American Recovery and
Reinvestment Act (ARRA) of 2009, an
economic stimulus package signed into
law by President Barack Obama on
February 17, 2009, includes domestic
spending in the energy sector (including
$11.1 billion for smart grid
investments). ARRA helped sustain
revenue gains in 2010 and 2011, but
funds have since run dry.
WWW.IBISWORLD.COM
Key Statistics
Industry Data
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
Revenue
($m)
37,499.7
38,367.3
39,530.4
41,538.2
46,240.7
47,629.6
35,915.8
37,482.9
38,264.3
39,251.1
40,742.7
42,576.1
44,662.3
46,404.2
47,332.2
34/195
211/706
Annual Change
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
Revenue
(%)
2.3
3.0
5.1
11.3
3.0
-24.6
4.4
2.1
2.6
3.8
4.5
4.9
3.9
2.0
93/195
333/706
Industry
Value Added
($m)
11,224.5
10,839.4
11,058.5
12,077.0
12,041.2
16,818.0
12,818.9
12,625.9
12,469.9
11,384.5
11,624.0
11,779.4
12,444.3
11,610.0
13,979.6
33/195
215/706
Establishments
2,488
2,443
2,451
2,397
2,407
2,403
1,829
1,930
2,010
2,091
2,169
2,266
2,375
2,466
2,514
40/195
456/705
Industry
Value Added
(%)
-3.4
2.0
9.2
-0.3
39.7
-23.8
-1.5
-1.2
-8.7
2.1
1.3
5.6
-6.7
20.4
189/195
692/706
Establishments
(%)
-1.8
0.3
-2.2
0.4
-0.2
-23.9
5.5
4.1
4.0
3.7
4.5
4.8
3.8
1.9
12/195
67/705
Key Ratios
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
IVA/Revenue
(%)
29.93
28.25
27.97
29.07
26.04
35.31
35.69
33.68
32.59
29.00
28.53
27.67
27.86
25.02
29.54
89/195
425/706
Imports/
Demand
(%)
35.06
37.07
39.43
41.72
40.68
40.24
41.45
44.70
47.95
49.82
51.71
53.74
55.66
57.47
59.13
38/183
44/226
Enterprises Employment
2,120
146,860
2,100
138,818
2,096
138,844
2,066
138,511
2,081
138,332
2,085
133,546
1,593
98,316
1,687
100,345
1,763
101,057
1,841
101,677
1,917
102,006
2,009
103,027
2,114
104,455
2,203
104,894
2,254
103,409
41/195
28/195
436/705
289/706
Exports
($m)
9,060.2
10,079.8
10,852.3
12,871.6
13,716.5
14,344.7
11,010.2
11,894.7
12,649.6
13,487.7
14,553.0
15,924.6
17,390.7
18,691.2
19,688.2
21/183
25/226
Imports
($m)
15,351.2
16,661.9
18,667.8
20,525.3
22,301.9
22,412.6
17,635.0
20,681.0
23,597.6
25,580.4
28,041.8
30,965.1
34,233.2
37,450.3
40,000.7
22/183
24/226
Wages
($m)
7,174.5
7,041.1
6,987.0
7,009.4
7,185.9
7,196.8
5,276.5
5,354.2
5,314.5
5,300.6
5,349.6
5,435.5
5,543.9
5,600.6
5,554.4
34/195
238/706
Domestic
Demand
($m)
43,790.7
44,949.4
47,345.9
49,191.9
54,826.1
55,697.5
42,540.6
46,269.2
49,212.3
51,343.8
54,231.5
57,616.6
61,504.8
65,163.3
67,644.7
26/183
32/226
Industrial Production Index

90.2
92.3
95.3
97.4
100.0
96.3
85.6
90.1
92.4
95.6
98.2
101.8
105.1
109.4
113.7
N/A
N/A
Enterprises Employment
(%)
(%)
-0.9
-5.5
-0.2
0.0
-1.4
-0.2
0.7
-0.1
0.2
-3.5
-23.6
-26.4
5.9
2.1
4.5
0.7
4.4
0.6
4.1
0.3
4.8
1.0
5.2
1.4
4.2
0.4
2.3
-1.4
10/195
113/195
46/705
479/706
Exports
(%)
11.3
7.7
18.6
6.6
4.6
-23.2
8.0
6.3
6.6
7.9
9.4
9.2
7.5
5.3
53/183
67/226
Imports
(%)
8.5
12.0
10.0
8.7
0.5
-21.3
17.3
14.1
8.4
9.6
10.4
10.6
9.4
6.8
45/183
59/226
Wages
(%)
-1.9
-0.8
0.3
2.5
0.2
-26.7
1.5
-0.7
-0.3
0.9
1.6
2.0
1.0
-0.8
124/195
546/706
Domestic
Demand
(%)
2.6
5.3
3.9
11.5
1.6
-23.6
8.8
6.4
4.3
5.6
6.2
6.7
5.9
3.8
56/183
70/226
Industrial Production Index

(%)
2.3
3.3
2.2
2.7
-3.7
-11.1
5.3
2.6
3.5
2.7
3.7
3.2
4.1
3.9
N/A
N/A
Exports/Revenue
(%)
24.16
26.27
27.45
30.99
29.66
30.12
30.66
31.73
33.06
34.36
35.72
37.40
38.94
40.28
41.60
37/183
47/226
Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.
Revenue per
Employee
($000)
255.34
276.39
284.71
299.89
334.27
356.65
365.31
373.54
378.64
386.04
399.41
413.25
427.57
442.39
457.72
94/195
241/706
Wages/Revenue
(%)
19.13
18.35
17.68
16.87
15.54
15.11
14.69
14.28
13.89
13.50
13.13
12.77
12.41
12.07
11.73
94/195
445/706
Employees
per Est.
59.03
56.82
56.65
57.79
57.47
55.57
53.75
51.99
50.28
48.63
47.03
45.47
43.98
42.54
41.13
99/195
143/705
Average Wage
($)
48,852.65
50,721.81
50,322.66
50,605.37
51,946.77
53,890.05
53,668.78
53,357.92
52,589.13
52,131.75
52,443.97
52,758.01
53,074.53
53,392.95
53,712.93
79/195
259/706
Share of the
Economy
(%)
0.09
0.09
0.09
0.09
0.09
0.13
0.10
0.10
0.09
0.08
0.08
0.08
0.08
0.08
N/A
33/195
215/706
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
BROWNOUT An intentional drop in voltage to prevent a

blackout.
GENERATOR An engine that converts mechanical
energy into electrical energy by electromagnetic
induction.
OFFSHORE The relocation of a companys business
process, such as manufacturing or accounting, from one
country to another, whether the work is outsourced or
stays within the company.
IBISWorld Glossary
SWITCHGEAR An electrical apparatus used to open and

close circuits; may also include devices that provide
protection for apparatus connected to an electrical
supply.
TRANSFORMER An electrical device by which
alternating current of one voltage is changed to another
voltage.
OUTSOUCE To procure goods or services under contract

with an outside supplier.
UNINTERRUPTIBLE POWER SUPPLY (UPS) An

electrical apparatus that provides emergency power to a
load when the input power source, typically the utility
mains, fails.
RELAY An electrical device in which current flowing

through one circuit can switch a current in a second
circuit on and off.
WHOLESALE BYPASS A popular trend within retail and

manufacturing industries where producers supply goods
directly to stores, eliminating the middleman.
BARRIERS TO ENTRY Barriers to entry can be High,

Medium or Low. High means new companies struggle to
enter an industry, while Low means it is easy for a firm
to enter an industry.
INDUSTRY CONCENTRATION IBISWorld bases

concentration on the top four firms. Concentration is
identified as High, Medium or Low. High means the top
four players account for over 70% of revenue; Medium
is 4070% of revenue; Low is less than 40%.
CAPITAL/LABOR INTENSITY An indicator of how much

capital is used in production as opposed to labor. Level is
stated as High, Medium or Low. High is a ratio of less
than $3 of wage costs for every $1 of depreciation;
Medium is $3 $8 of wage costs to $1 of depreciation;
Low is greater than $8 of wage costs for every $1 of
depreciation.
CONSTANT PRICES The dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using 2012 as the base year. This removes the
impact of changes in the purchasing power of the dollar,
leaving only the real growth or decline in industry
metrics. The inflation adjustments in IBISWorlds
reports are made using the US Bureau of Economic
Analysis implicit GDP price deflator.
DOMESTIC DEMAND The use of goods and services
within the US; the sum of imports and domestic
production minus exports.
EARNINGS BEFORE INTEREST AND TAX (EBIT)
IBISWorld uses EBIT as an indicator of a companys
profitability. It is calculated as revenue minus expenses,
excluding tax and interest.
EMPLOYMENT The number of working proprietors,
partners, permanent, part-time, temporary and casual
employees, and managerial and executive employees.
ENTERPRISE A division that is separately managed and
keeps management accounts. The most relevant
measure of the number of firms in an industry.
ESTABLISHMENT The smallest type of accounting unit
within an Enterprise; usually consists of one or more
locations in a state or territory of the country in which it
operates.
EXPORTS The total sales and transfers of goods
produced by an industry that are exported.
IMPORTS The value of goods and services imported
with the amount payable to non-residents.
INDUSTRY REVENUE The total sales revenue of the

industry, including sales (exclusive of excise and sales
tax) of goods and services; plus transfers to other firms
of the same business; plus subsidies on production; plus
all other operating income from outside the firm (such
as commission income, repair and service income, and
rent, leasing and hiring income); plus capital work done
by rental or lease. Receipts from interest royalties,
dividends and the sale of fixed tangible assets are
excluded.
INDUSTRY VALUE ADDED The market value of goods
and services produced by an industry minus the cost of
goods and services used in the production process,
which leaves the gross product of the industry (also
called its Value Added).
INTERNATIONAL TRADE The level is determined by:
Exports/Revenue: Low is 05%; Medium is 520%;
High is over 20%. Imports/Domestic Demand: Low is
05%; Medium is 535%; and High is over 35%.
LIFE CYCLE All industries go through periods of Growth,
Maturity and Decline. An average life cycle lasts 70
years. Maturity is the longest stage at 40 years with
Growth and Decline at 15 years each.
NON-EMPLOYING ESTABLISHMENT Businesses with
no paid employment and payroll are known as
non-employing establishments. These are mostly set-up
by self employed individuals.
VOLATILITY The level of volatility is determined by the
percentage change in revenue over the past five years.
Volatility levels: Very High is greater than 20%; High
Volatility is between 10% and 20%; Moderate
Volatility is between 3% and 10%; and Low Volatility
is less than 3%.
WAGES The gross total wages and salaries of all
employees of the establishment.
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Electrical Equipment Manufacturing in The US Industry Report

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Electrical Equipment Manufacturing in the US August 2012 1

Sparking interest: Increasing exports and

IBISWorld Industry Report 33531

2 About this Industry

34 Regulation & Policy

23 Market Share Concentration

23 Key Success Factors

23 Cost Structure Benchmarks

Key External Drivers

28 General Electric Company

12 Industry Life Cycle

37 Jargon & Glossary

14 Products & Markets

15 Products & Services

33 Technology & Systems

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Electrical Equipment Manufacturing in the US August 2012 2

About this Industry

Firms in this industry primarily

The primary activities of this industry are

relays; and industrial controls. Electrical

The major products and services in this industry are

33361a Engine & Turbine Manufacturing in the US

Electrical Equipment Manufacturing in the US August 2012 3

About this Industry

33593 Wiring Device Manufacturing in the US

For additional information on this industry

writes over 700 US

Electrical Equipment Manufacturing in the US August 2012

Annual Growth 07-12

Annual Growth 12-17

Per capita disposable income

Revenue vs. employment growth

ABB Ltd. 5.8%

Products and services segmentation (2012)

Key External Drivers

Demand from building,

Per capita disposable

Motors and generators

Relays and industrial

Life Cycle Stage

Electrical Equipment Manufacturing in the US August 2012 5

Executive Summary | Key External Drivers | Current Performance

Revenue for the Electrical Equipment

rise in import penetration will slightly offset

Key External Drivers

Demand from building, developing

States to lower-cost countries. While

2012, presenting a potential opportunity

Electrical Equipment Manufacturing in the US August 2012 6

higher disposable incomes. This driver is

demand is satisfied by electrical

Per capita disposable income

Key External Drivers

Electrical Equipment Manufacturing in the US August 2012 7

IBISWorld estimates revenue for the

In light of profit pressures and even

conducted at overseas plants. As a result,

The industry sells a broad range of

production, fixed investment and

countries. Additionally, higher input

Electrical Equipment Manufacturing in the US August 2012 8

growth. New technologies and

Heavy Industrial Facilities Construction in the US

Construction Machinery Manufacturing in the US

Semiconductor Machinery Manufacturing in the US

Engine & Turbine Manufacturing in the US

Wind Turbine Manufacturing in the US

Electronic Part & Equipment Wholesaling in the US

Iron & Steel Manufacturing in the US

Wire & Spring Manufacturing in the US

Screw, Nut & Bolt Manufacturing in the US

Metalworking Machinery Manufacturing in the US

Metal Wholesaling in the US

Level & Trend