Market Monitor2017

June 2017

2

BACKGROUND

NECA facilitates abiennial industry

survey, sponsored by leading suppliers to

the industry

The objective of the study is to understand

the opinions of electrical contractors and other employees

within their businesses

This contributes to the understanding of the

electrical and communications industry plus the development of

key advocacy policies

3

WHO RESPONDED 2017

This year MM was in field from December 2016 to April 2017. We had 909

people answer the survey

As a proportion of respondents, we saw more participation by Victoria this year (19%) therefore NSW (27%) and QLD (20%) declined as a percentage.

This year saw a stronger representation from small business, with more owner/independents answering than last time

The respondents were also slightly younger this year,

although still peaking in the 35-46 age bracket

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KEY EMERGING THEMES

Digital is changing the way contractors want to do business

Compliance is top of mind for contractors

1

1

Technology is changing the nature of business – particularly renewables and SMART.

The customer is having more and more of a say

Optimism has improved although competition for work is high

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TOP RECOMMENDATIONS TO WHOLESALERS AND MANUFACTURERS

Research and decision making is changing. To compete, manufacturers and wholesalers must have a high functioning, live online presence. This includes websites, ordering, apps and social media.

Wholesalers need to differentiate beyond price and availability by delivering better service to electricians who desire supportive relationships with suppliers they trust.

1

1

There is an unmet need for more locally available innovative products, particularly in automation and control.

As end-customers become increasingly knowledgeable and involved in the decision making process, help electricians navigate this opportunity with appropriate sales support / tools.

Automation and control is a big theme – this is predicted to be an emerging area, is rapidly becoming a specialisation but there is a skill gap and is the largest market for grey leakage as contractors look overseas to meet their needs. Support is required in learning and meet product requirements.

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RATES AND CHARGES

7

Labour (cost recovery), 31%

Labour (profit or mark-up), 18%

Materials (cost recovery) , 28%

Materials (profit or mark-up), 17%

Other, 5%

Cost Recovery

Cost recovery accounts for 60% of total billings, with an average profit margin of 36%. 45% of billings relate to material costs

No significant change between 2015 and 2017 studies.

Approximately what proportion of your total billings are comprised of the following components? n=285

Labour accounts for nearly half of billings, but labour cost recovery slightly down

from 2015 (from 34%),

8

Slightly higher incidence of call out fees in 2017.

What methods of charging customers do you use? n = 417

50% 51%49%

54%

48%51%

Hourly rate & call-out fee Hourly rate only Fixed rate, depending on job

%Charging Methods

2015

2017

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Fixed rate more prevalent for the big companies. Small players tend to use hourly rate only more often than bigger companies.

What methods of charging customers do you use? n = 272

54

48 51

46

57

48

67

38

51 54

35

62

Hourly rate & call-out fee Hourly rate only Fixed rate, depending on job

Charging Methods

TOTAL

1-5 (n=152)

6-25 (n=84)

26+ (n=37)*

%

10

Call out fee has dropped slightly, while average hourly rate for tradesman has stayed the same

What is your call out fee? n = 134

Perhaps because more businesses using call out fees this year?

91

83

128

90

110

90

Average Call out Fee Average hourly rate (tradesman)

Average Rates Charged

2013 2015 2017

$ in

c G

ST

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On average, a tradesman’s hourly rate is $90 including GST. NSW and Victoria have the lowest hourly rates.

What is your call out fee? n = 134 What is your hourly rate, incl GST?

$90.5

$86.4

$89.4

$92.5

$88.6

$100.6

TOTAL NSW QLD SA VIC WA

Average Rates Charged

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Apprentice hourly rates continue to rise year on year

What is your hourly rate, incl GST?

37

45

54

63

42

49

58

67

48

54

62

70

1st Year 2nd Year 3rd Year 4th Year

Apprentice Hourly Rate Comparison $ inc GST

2013 2015 2017

Thankyou.

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