This report analyses the market for electrical contracting. We estimate the output value of this market in Great Britain to have been £12.85bn in 2008 — an increase of 1.3% compared with the previous year. Electrical contracting is an important part of the construction industry and covers the installation of fixed electrical wiring and fittings for electrical power, lighting, alarms, security systems and communications equipment.

The electrical contracting market depends heavily on the construction industry, which is examined in terms of housing, infrastructure, industrial and commercial work. While these different aspects of the construction industry all require electrical contracting services, the type of work for each varies. In the housing sector, for example, work is relatively simple and repetitive, but in the infrastructure sector (e.g. airports, rail networks), electrical contracting can be very complex and may require specialist knowledge.

Small companies (including the self-employed) dominate the electrical contracting market, carrying out local work including some small domestic jobs. At the other end of the scale, there is a small number of very large companies providing a range of building services including electrical contracting. Much of the work carried out by these companies is for Public Private Partnership (PPP) work and may involve long-term contracts.

In common with other aspects of the construction industry, the electrical contracting sector faces difficulties arising out of the current UK economic downturn. A major problem here is the reluctance of banks to arrange credit for construction projects, which is causing a fall in construction output that is consequently expected to result in a decline in electrical contracting. Such difficult conditions are likely to encourage rogue traders to carry out work undercutting reputable electrical contractors, which may lead to dangerous installations.

Regarding the future, electrical contracting is forecast to experience a downturn following falling output in the construction industry. However, some aspects of the electrical contracting sector are expected to fare better than others. To help ease the effects of the present recession, the Government plans to spend on public-sector projects sooner than originally expected, and this should provide work for electrical contractors with skills in this area. In contrast, housebuilding is likely to be depressed for the immediate future. Future opportunities for electrical contractors are expected to include expanded business for communications, IT and electrical services for renewable energy projects (e.g. wind farms, solar power).

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