For Immediate Release
Chicago, IL – October 12, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Electrical Products sector, including Hubbell Inc (HUB.B), Thomas & Betts (TNB), WESCO International (WCC), W.W. Grainger (GWW) and Anixter International (AXE).
Here is the latest on the Electrical Products sector:
The U.S. Electrical Products industry is highly fragmented, with the largest suppliers together accounting for only a small percentage of total sales. Some of the largest players in this market are Hubbell Inc (HUB.B) and Thomas & Betts (TNB), which distribute their own products. Other manufacturers sell through distributors such as WESCO International (WCC), W.W. Grainger (GWW) and Anixter International (AXE).
The primary factors influencing growth in this market are new construction activity (residential, industrial and commercial), regular repair and maintenance activities, large government construction projects and calamity-driven spending (natural disasters and terrorist attacks). The split between new construction revenue and rehabilitation/renovation revenue is roughly 2:1 in non-recessionary market conditions.
We track the Architecture Billings Index (ABI) for determining the condition of construction markets. The ABI indicates architectural billings, which lag construction spending by around 9-12 months. A score above 50 generally means growth in billings.
The ABI for August 2009 was 41.7, compared to 43.1 in July. The sector-wise breakdown was commercial/industrial (ABI 45.6), multi-family residential (ABI 43.4), mixed practice (ABI 41.4) and institutional, which includes religious and government, (ABI 37.5). The below-50 number for all sectors and regions across the U.S. indicates continued broad-based weakness across all construction markets in the next 9-12 months.
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