Electrical Equipment Manufacturing Valuation Multiples
Electrical Equipment Manufacturing: Navigating Market Trends, Private Company Multiples and Valuation.
Electrical Equipment Manufacturing
Industry: Electrical Equipment Manufacturing
Naics: 335310
Private Company Multiples
Industry Overview
The Electrical Equipment Manufacturing industry has experienced moderate volatility in recent years, navigating challenges from the pandemic, supply chain disruptions, and fluctuating demand from key sectors like industrial manufacturing and construction. Despite these hurdles, the industry has shown resilience, with revenue growing at an estimated CAGR of 2.7% to reach $57.1 billion in 2024, including a 0.4% gain in 2024 alone.
Market Size
The industry is projected to grow at a CAGR of 2.3%, reaching $64.0 billion by 2029. This growth will be driven by ongoing economic recovery, stabilizing input prices, investments in new technologies, and increased demand from infrastructure projects. The global electrical equipment market is expected to grow from $1553.7 billion in 2024 to $3773.7 billion by 2032, at a CAGR of 11.7%.
Key Players and Market Concentration
The industry is characterized by a mix of numerous small-scale manufacturers and a few dominant large companies. The four largest electrical equipment manufacturers comprise more than 45.0% of industry revenue, with Schneider Electric leading the market. Other major players include Eaton Corporation, ABB Ltd., Siemens AG, General Electric, and Emerson Electric Co. Market concentration has been increasing due to consolidation efforts by larger companies targeting smaller, innovative firms.
Workforce
The electrical equipment manufacturing industry in the US consists of about 1,600 companies employing approximately 147,000 workers. A typical manufacturer employs about 90 workers and generates around $27 million annually. The industry faces a growing need for skilled labor, particularly as it invests in new technologies like artificial intelligence and automation.
Future Outlook
The future of the Electrical Equipment Manufacturing industry looks cautiously optimistic, with several key trends emerging:
- Increased demand driven by infrastructure investments and grid modernization
- Growing focus on renewable energy and smart grid technologies
- Continued investment in AI, automation, and other advanced technologies
- Expansion of export opportunities due to a weakening US dollar
- Ongoing challenges from import competition and potential trade tensions
Factors Influencing Higher Valuation
Factors that can lead to higher valuations in this industry include:
- Long standing client relationships
- Strong R&D capabilities and technological innovation
- Diversified product portfolio across various electrical equipment segments
- Efficient supply chain management and production processes
- Strong presence in growing markets, particularly in renewable energy and smart technologies
- Ability to navigate trade policies and tariffs effectively
- Minimal customer concentration
How to Grow Your Electrical Equipment Manufacturing Business
To thrive in this competitive industry:
- Invest in research and development to stay at the forefront of technological advancements
- Focus on developing energy-efficient and smart electrical equipment
- Explore opportunities in renewable energy and grid modernization projects
- Consider strategic partnerships or acquisitions to expand market presence
- Optimize supply chain management to mitigate disruptions and control costs
- Invest in workforce development to address the need for skilled labor
- Develop strong relationships with wholesalers and key customers in manufacturing and construction sectors
Key Financial Metrics
Income Statement Benchmark
