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The third quarter will see product shortages and price increases for electrical products counteracting the price reductions of the second quarter

IRVINE, CALIFORNIA, USA, August 10, 2022 /EINPresswire.com/ — Supply chain issues will continue to plague the electrical industry well into 2022. End buyers of electrical projects should expect volatile costs and project delays due to product shortages.

Raivenone of the leading providers of supply solutions for contractors and building owners, analyzed its platform’s pricing trends and contacted electrical contractors, distributors and manufacturers to gather the latest information on the state of the electrical supply chain.

Q2 IN REVIEW

business confidence

Current and future National Electrical Manufacturers Association (NEMA) business confidence fell 10 percentage points in the second quarter, indicating a slowdown in electrical manufacturing output.

According to 78% of respondents, increases in interest rates have contributed the most to the decline in manufacturer confidence. A rapid reduction in residential mortgage applications, coupled with higher ownership costs, led to the suspension of major industrial projects scheduled for the second half of the third quarter.

Raw material pricing

Commodity prices, a leading indicator of future economic growth, fell dramatically in the second quarter. Copper fell 23.2% from its March high, while nickel and steel recorded double-digit declines of 49% and 36%. This suggests that a significant slowdown in production and demand will occur in the second half of 2022.

Delays

The majority of the top 150 manufacturers reported delays of up to 30 days for the following product categories in Q2, which may persist into Q3:
● Wire and cable
● Conduit fittings
● Steel conduit
● Ballast and LED lights
60% of distributors reported a minimum lead time of six months for switchgears, with lead times of one year for larger switchgear configurations.

EXPECTATIONS FOR Q3

Panels and switches

Siemens recently extended the minimum expected lead time for its core line of panelboards and switches to between 40 and 53 weeks, a 10% increase from the second quarter. One of the biggest contributors to longer lead times is the shortage of in-house electrical engineers available for lead time negotiations.

circuit breakers

China and Germany, the largest manufacturers of circuit breakers, account for nearly 50% of global production. China’s production levels have recently slowed by more than 20% due to COVID-19 restrictions and difficulties in receiving raw materials. Germany’s manufacturing production index fell from 66 to 52 in the past year, a drop of 21%.

Equipment

There are no major changes to the 12-16 month lead times that Raiven reported in Q1 and Q2. Supply chain issues and limited manufacturing capacity remain contributing factors.

wire and cable

Although prices for some commodities may decline, wires and cables face considerable risk in the third and fourth quarters. Copper futures have hit recessionary levels. Global metal supply uncertainty due to Russian sanctions, energy insecurity and smelting persists. Deflationary recessionary pressures and inflationary manufacturing costs will keep yarn prices high with nominal price declines in the fourth quarter.

EV charging stations

Retailers are seeing an upward trend in electric vehicle charging installations and expect rapid growth in the third quarter, with 57% reporting installations at local businesses, parking lots and stores and 50 % reporting materials purchased for electric vehicle installations at local government, schools and transit facilities.

Biden’s infrastructure spending

70% of contractors and distributors surveyed did not see activity under Biden’s infrastructure bill regarding (a) high-speed broadband, (b) utility network expansion, or (c) renovation of school/federal buildings. This activity is expected to increase in the third quarter as the election approaches and summer project activity decreases.

Regions bucking the trend

Southern California and Michigan are identified by Electrical Marketing’s demand analysis as having significant industrial and commercial activity that will peak in the third quarter of 2022 before experiencing the expected nationwide economic downturn.

2022 ELECTRICAL GOODS PRICE TRENDS AND Q3 AR PROJECTIONS

“Raiven’s technology searches real-time among distributors to find product availability at the lowest prices,” said Brett Knox, CEO of Raiven. “We launched Raiven in a browser extension during the pandemic to help contractors and facility managers find COVID-19 essentials and we’ve expanded to offer a wide variety of electrical, HVAC and utility products. building maintenance. Although prices fell in the second quarter, product shortages and stock-outs occurred frequently and will continue in the third quarter. Raiven’s sophisticated algorithm continues to find in-stock products and identify price anomalies for high-demand products in short supply.

ABOUT RAVEN

Raiven is a leading procurement and supply chain management software platform enabling contractors and facility managers to digitally transform their procurement process and earn deep discounts on their everyday purchases. Raiven’s cloud-based sourcing platform helps businesses buy smarter and more efficiently with patent-pending AI algorithms that find in-stock products at the lowest prices.

jeff gold
Raiven
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