Mid-April COVID-19 Electrical Market Sentiment Report

COVID-19 continues to run rampant throughout the country.  When we conducted our first Electrical Market Sentiment Report we went from zero to twenty-seven states under “shelter-in-place”.  Our recently released second report, Mid-April COVID-19 Electrical Market Sentiment Report, which shares input from over 650 people in the electrical industry is impacted by forty-two states under “shelter-in-place”.  In March few had construction closed.  In April, not only are some states closed to construction, but many electrical distributors have closed their counters.

The report, a collaboration between Channel Marketing Group and DISC Corp, was sent to readers of ElectricalTrends and Electrical Wholesaling, our respective clients / email lists, NEMRA and IMARK Group members and Egret Consulting shared with their contacts.  The goal was to reach a broad audience.

Survey respondents received a complimentary copy of the report as well as an invitation to our Wednesday, April 22, 2:00pm EDT webinar titled “COVID-19 Market Implications for Electrical Markets Webinar” conducted by IHS Market, construction and manufacturing economists, sponsored by Channel Marketing Group and DISC Corp. (if you want an invite, contact either company.)

Mid-April Electrical Market Sentiment Report Highlights

• Input from 658 individuals with 42% from distributors, 29% from manufacturers and 23% from manufacturer representatives
• Through the first two weeks, on average, the audiences experienced a 20%, or so sales decline, accelerating the late March sales decline by 100%. In some markets the decline is 50% or more!
• Q2 forecasts, by audience, range from -20 to -26%. (Interesting to note the DISC national forecast for Q2, released earlier this month, is for down -20.6%)
  • This could be “light” based upon COVID-19 duration and how the phased reopening of the economy occurs (and what states) as well as distributors pulling down backlog now but not building backlog and quotation activity being down, or …
  • It could be accurate from a national perspective as media reporting skews to major cities and there are significant geographic areas that are not significantly impacted.
• As expected, metropolitan areas are most impacted.
• 59% of distributor respondents reported that their company has closed their counters.
• eCommerce activity has increased for only about 20% of respondents.
• 37% of distributor respondents reported that their companies have implemented furloughs / layoffs and 32% have undergone some type of compensation change. (and anecdotally, we’ve also heard of some opportunistically hiring and some that are open to hiring once they receive their Payroll Protection Program monies as they may look at “upgrading” staff or taking advantage of opportunities.)
• Many are utilizing “downtime” to catch up on training as well as process improvement
• Concerns are mounting regarding contractor receivables as well as inventory levels.
• We’ve also heard of some distributors that have already gone out of business.
• With the sales world going virtual, some are asking how this will change the role of distributor sales? How will it change interaction with suppliers? How will it change relationships with distributor? How will it change the role of the regional sales manager?
• Digital marketing efforts have increased (while the increased visibility is good, the question of efficacy has been raised.)
• Manufacturers are seeking field level feedback relating to customer insights as well as state “plans” for reopening.  The phased reopening could be a challenge for manufacturers who are used to responding to issues nationally rather than gearing up for specific geographic areas.
• Some manufacturers mentioned supply chain concerns due to factories having to close due to COVID-19 incidents as well as COVID-19 in Mexico.

A bright spot?

A significant percentage of distributors and manufacturer representatives report that their companies applied for, and presumably will receive, monies from the Payroll Protection Program (PPP).  Further, in the survey 60-75% report that their companies are starting to talk / plan for “post COVID-19”, inevitably viewing the light in the tunnel as an exit, not on oncoming train, as they consider how post COVID-19 will look like for their business. (Reps who’ve received monies and are thinking beyond survival should review the recently released NEMRA Rep of the Future report as an element of their blueprint for success … same with manufacturers.)

The report also includes an extensive Appendix with verbatim input to open-ended questions so that each reader can extract insights pertinent to them.

The complete 82-page report is available for $50.  $25 of the cost of the report is a donation to the Gary Sinise Foundation to support our defenders, veterans, first responders, their families, and those in need.

Click here to order the report

How is COVID-19 impacting your market? Your business?

Our next survey will be the beginning of May. If there are specific questions you would like us to consider email us.

Feedback on our Mid-April Electrical Market Sentiment Report from others who have seen the report already includes:

• Really interesting. I am halfway thru…
• Some great stuff in here.
• Good report, very thorough. In some ways I’m surprised things are still as good as they are considering how much of the country is shut down.
• Well done! The Appendix is very interesting.
• David – this is, as always, very good
• Really good info! Passed up the food chain.