The 2026 State of Electrical Contracting

Who this is for

You hold the master license — or you pay someone who does. You bid the jobs, you carry the payroll, and you are the name on the phone the night a data center's panel trips and the client needs you yesterday. You spend your week chasing apprentices you can't find, keeping your licensed journeymen busy and loyal, scheduling service calls around new-construction rough-ins, and waiting on an inspector to clear a permit so you can bill the draw.

This brief is for you — the operator. It is not for the general contractor who subs the electrical out. It is not for the homeowner Googling "how much to add a circuit." It's for the person who owns the trucks and signs the checks.

Here's what it gives you:

1. The numbers, straight — what the industry actually earns, cited.
2. The consolidation wave — who's buying electrical shops and roughly what they pay (and an honest flag on how thin that data is).
3. The succession gap — the force quietly setting the price of every owner-run shop in the country, and why it hits electrical harder than the other trades.
4. What your company is worth — and the specific levers that move that number up.

One promise on how we handle facts. Where a figure is a hard data point, we cite it. Where it's an estimate or a range drawn from the data, we say so plainly. We would rather under-claim than have you catch us inflating a number — because if we lose your trust on page two, nothing else in here matters.

Part 1 — The numbers, straight

Start with the size of the thing you're in.

The U.S. electrical contracting industry — IBISWorld's "Electricians" category, NAICS 238210 — runs about $347.5 billion in revenue in 2026, up roughly 0.7% on the year. The total profit pool sits near $24.3 billion, which works out to an industry net profit margin of about 7.0%.

That 7.0% is the headline number, and it's worth sitting with. It is the best net margin of the major trades. Plumbers, by the same source, net about 5.7%. Electricians clear more on every dollar than the guys running drain snakes.

The market is also extremely fragmented. There are roughly 261,958 enterprises and about 264,726 establishments in the category — meaning the typical electrical business is a single-location, owner-run shop. For scale: that's roughly twice the number of plumbing enterprises. The industry employs about 1,291,154 people. Nobody owns this market. There is no dominant chain. It is tens of thousands of independent operators, most of them named after the man who started them.

Growth is steady, not explosive. The long-run revenue CAGR is about 3.18%, with roughly 2.24% annual growth projected through 2032, pointing the industry toward about $388.8 billion. Not a rocket. Not a decline either — a durable, structurally-supported climb.

What's pulling it up:

• A permanent electrician labor shortage — worse than plumbing, because the apprenticeship-to-license path is longer and the math wall (load calcs, code) thins the field.
• Code and safety regulation that forces licensed work and re-work.
• EV-charger installs at homes, fleets, and commercial sites.
• Decarbonization and green upgrades — panel upgrades, electrification of heat and appliances.
• The standout: AI-driven data-center expansion, which is creating electrician demand at a scale the industry has not seen before. Every new data center is, underneath, an enormous electrical job — and the build pipeline is years deep.

Now the honesty note on that 7.0%, because it will mislead you if you take it flat.

IBISWorld's 7.0% is a NET margin — what's left after labor and overhead. It is not what you keep gross. Electricians typically run a gross margin of 35–45% (revenue minus materials and subbed-out work). A disciplined owner-operator shop that controls labor and overhead nets somewhere in the 10–18% range — above the industry's blended 7.0%, because that blended figure is dragged down by the big, thin-margin commercial books and the loosely-run shops.

A clean, transferable electrical shop typically runs roughly 12–18% EBITDA. Hold that number — it's the one that sets your price.

Source: IBISWorld, "Electricians in the US" (NAICS 238210, updated January 31, 2026, analyst Matthew Pigott), via the Planet's Problems research and analysis. The gross-vs-net distinction and the EBITDA read are our analysis of the IBIS net figure.

Part 2 — The consolidation wave: who's buying, and at what price

Be clear-eyed here. Electrical is not as swept-up as HVAC. The roll-up machine that has chewed through heating-and-cooling for a decade is newer and more moderate in electrical. But it is real, it is accelerating, and it splits along two lanes.

The two lanes:

1. Residential / light-commercial electrical is being rolled up alongside HVAC and plumbing by the big home-services private-equity platforms. To them, an electrical book is a bolt-on — more trucks, more service revenue, more cross-sell into the same homeowner base.

1. Commercial and industrial electrical is being consolidated separately, by infrastructure-focused platforms chasing the data-center and electrification tailwind. This is where the serious money is moving, because a commercial electrical contractor with the workforce and bonding capacity to take data-center work is a scarce, strategic asset right now.

A third path matters even though it isn't a buyer: ESOP conversions — selling the company to an employee stock ownership trust. For an aging owner with loyal licensed staff and no outside buyer, an ESOP is a legitimate exit, with tax advantages, that keeps the shop intact.

On price — read this slowly, because this is where we are most careful.

As a market-structure read, not published figures:

• Owner-operator / owner-dependent shops — where the value walks out the door with the founder — trade in roughly the 2.5x–3.5x SDE range.
• Larger, manager-run commercial books with real signed backlog and recurring service revenue trade higher, into the mid-single-digit EBITDA multiples.
• The strongest, data-center-exposed commercial platforms can reach higher still.

The point that matters even if you never sell a single share: a PE-backed competitor with a checkbook beats you on density and on labor pull. They can pay your best journeyman 15% more, route trucks tighter across a metro, and eat a slow quarter you can't. Consolidation changes your competitive ground whether or not you ever take a meeting.

Part 3 — The succession gap

This is the headline force. Read it twice.

The construction trades are aging hard, and electrical is near the front of it. A very large share of electrical-contracting firms are owned by men who started them in the 1970s, '80s, and '90s — men now 55 to 70-plus — and a great many of them have no successor lined up.

Here's the cruel mechanics of it: the same labor shortage that drives all that demand in Part 1 is exactly why there's no one to buy the shop. There is no line of young licensed electricians with capital and a master's license waiting to step in. The shortage that makes your phone ring is the shortage that strands your exit.

And electrical has a wall the other trades don't have as steeply: the master-license structure. In most states the company must have a licensed master electrician of record. When that license belongs to the retiring owner, the business cannot simply transfer to an unlicensed buyer — the buyer has to either already hold a master's license (rare, in a buyer with capital) or retain or hire a licensed master to be the qualifier. That single fact kills or discounts a large number of otherwise-sellable shops.

1. Trades-workforce age data — the documented graying of the construction trades.
2. The nothing-published reality — most of these owners have done zero formal succession planning; there's no plan to count.
3. Owner-operated industry patterns — when you actually pull lists of these companies, you see it: the founder's surname as the company name, "Since 1987" on the truck, "family owned and operated."

Put it together and the imbalance is plain: motivated, aging sellers are rising; qualified, licensed buyers are scarce. That asymmetry puts down-pressure on owner-dependent firms (a buyer discounts hard for "the whole thing is the founder and his license") and up-pressure on firms that already run without the founder and carry licensed staff on the payroll.

This succession squeeze is arguably more acute in electrical than in almost any other trade — precisely because of the license wall. A buyer can take over a landscaping company on a handshake. They cannot take over your electrical company without solving the master-of-record problem first.

Part 4 — What your company is actually worth (and the levers)

A serious buyer values your shop in three steps. Understand them and you can move the number on purpose.

Step 1 — Normalize the earnings. The buyer doesn't care what your tax return says you "made." They rebuild it into SDE (seller's discretionary earnings, for a small owner-run shop) or EBITDA (for a larger manager-run one), with add-backs — your salary, one-time costs, and the personal expenses run through the business.

This is where trades owners cost themselves money. You run a truck, the family phone plan, maybe a vehicle or two, some travel, through the company. Every dollar of that you can't document as an add-back is a dollar the buyer treats as a real business expense — and it hides the very number that sets your price. Clean books that prove your add-backs can swing the valuation by six figures on a shop this size.

Step 2 — Set the multiple. The multiple is a measure of risk.

Step 3 — Price the defining risks: cyclicality and the license. Project-only, new-construction revenue swings with interest rates and the construction cycle — when rates rise and builds stall, that book dries up. A buyer pays a premium for recurring service revenue that keeps flowing in a down year, and for transferable licensing that means the company survives the founder's retirement. Those two things — recurring revenue and a license that isn't yours alone — are the difference between the bottom and the top of the range.

A grounded illustration (this is an illustration, not a quote or an appraisal):

Take a $3M-revenue shop with about $450K SDE. Owner-dependent, project-heavy, owner holds the only master license, books in his head. At roughly 3x SDE, that's about $1.35M.

Now move that same shop: two licensed masters on staff so the company isn't the owner's license, a recurring service book under the project work, signed backlog, clean job-costing. Now it's not a 3x-SDE owner shop — it's a business a strategic or PE buyer underwrites toward the higher EBITDA-multiple band. Same trucks, same trade, materially higher price — because you removed the risks the buyer was discounting for.

The five levers — in priority order:

1. Get a second (or third) licensed master on staff so the business isn't your personal license. This is the single biggest one in electrical.
2. Build recurring service / maintenance revenue underneath the project work — service agreements, scheduled maintenance, a managed-account book.
3. Systematize job-costing and estimating out of your head and into software a buyer (or a GM) can run.
4. Diversify off any single GC or customer so no one phone call is 40% of your revenue.
5. Clean the financials and document the add-backs so the number that sets your price is provable, not buried.

Run these and you raise both the earnings the buyer normalizes and the multiple they apply to it. You get paid twice for the same work.

Where the data in this brief comes from

• Industry size, margin, firm count, CAGR, and demand drivers — IBISWorld, "Electricians in the US" (NAICS 238210, updated January 31, 2026, analyst Matthew Pigott), via the Planet's Problems research and analysis.
• The gross-vs-net distinction and the EBITDA read — our analysis applied to the IBIS net figure, not separate published numbers.
• Consolidation buyer-types and multiple ranges — our market-structure read, explicitly flagged as estimates. We do not have verified named-buyer or named-multiple data for the electrical lane; the buyer types are accurate, the ranges are directional.
• Succession and owner-age — structural inference from trades-workforce age data, the absence of formal succession planning, and owner-operated industry patterns. It is not an invented precise statistic, and we don't present it as one.

A note from Planet's Problems

This is operator-grade intelligence — the kind that usually sits behind a $5,000 advisory invoice. We're giving it away because of what we do with the people who read it.

We record conversations with operators who built real, durable businesses — the ones who found the apprentices, kept the licensed staff, survived the rate cycles, and made the trucks roll for thirty years. It's not a sales pitch. It's not a webinar funnel. It's a conversation about how you actually built the thing, recorded for people who are trying to do the same.

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No obligation, no pitch. Just a conversation worth recording.

This brief is general industry intelligence, not financial, legal, or valuation advice. Figures cited from IBISWorld are reported as published; estimates and ranges are labeled as such throughout and reflect our market-structure read, not verified transaction data. Do not make a buy, sell, or financing decision on the basis of this document alone. Consult your own licensed financial, legal, and valuation professionals before acting.