It’s another new year, and with it comes opportunities here in Omaha, and nationally, across the commercial electrical contracting landscape.
In this energy outlook for 2024, we share what you need to know about the electrical industry in the year ahead.
Energy Outlook 2024
Last year, DISC Corp. President Chris Sokoll, predicted a recessionary climate and a year of negative growth for the electrical market. Amid ongoing rate hikes from the Federal Reserve, Sokoll projects electrical market sales will decline by 1.6% in 2024 from $137.4 billion to $135.2 billion. His company surveys electrical distributors and typically sees growth estimates of 4% to 8%. For 2024, those estimates came in at +9.7%. Adjusted for inflation, Electrical Wholesaling is estimated to grow by 6.8% to $146.8 billion.
As Electrical Marketing states, the Consensus Construction forecast, which is published by the AIA, anticipates nonresidential construction to grow by 2% in 2024. Nationally, a +0.8% growth in GDP is forecasted.
Mixed Results Here at Home
The Mid-America Business Conditions Index, which Creighton University uses to gauge the economic health of a nine-state region including Nebraska, climbed above 50. That marker put growth just above neutral in November of 2023.
Interestingly, about 60% of supply managers expect an economic downturn in the first half of 2024. Excessive inflation, labor shortages and supply chain disruptions were the top economic threats indicated by survey respondents.
On the Federal Reserve front, Ernie Goss, Ph.D., director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, predicted a 25-basis point (0.25%) increase. Looking ahead six months from October 2023, the Business Confidence Index fell to 25, from 29.6.
That could anticipate slowing business conditions during the first part of the new year. And the news isn’t better for Nebraska. As the survey reports, “After advancing above a growth neutral rating for September, Nebraska’s Business Conditions Index sank to 48.8 from 50.6”
EIA Projects More Energy From Renewable Sources in 2024
The U.S. Energy Information Administration (EIA) released some positive news for renewable or “green” energy sources in its most recent short-term energy outlook. It is expected that new wind and solar energy capacities will reduce electricity generation from coal-fired and natural gas-fired plants in the year ahead.
They project wind and solar energy will rise to 18% of total energy generation. And, the EIA notes that renewable energy sources now account for nearly 25% of total energy generation by the U.S. electrical power sector.
Globally, an EIU report projects energy consumption will grow by 1.8% this year. They also project demand for fossil fuels to reach record levels but believe renewable energy demand will also rise by 11% worldwide.
Miller Electric has a Bright Future
Taking all things into consideration and our strong standing within the still-going-strong Omaha business community, we believe business confidence is up and that spells bright things in the upcoming year.
Our strong culture, commitment to electrical training and safety, and the values and integrity of our employees will translate into success for our clients and community this year and in the years to come.