ONE PROBLEM, IN DETAIL

ELECTRICAL: THE 2026 MATERIAL SQUEEZE

QUICK ANSWER

Copper traded at $5.92 per pound in May 2026, up 24.75 percent year over year, with a 50 percent copper tariff in effect since August 2025 and a projected global deficit near 150,000 tons.

This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the electrical operating system page.

BY JOSH LUEBKERPublished 2026-08-06Updated 2026-08-06
WHAT BREAKS

WHERE THE MONEY GOES.

The 2026 material squeeze (copper and switchgear)

Copper traded at $5.92 per pound in May 2026, up 24.75 percent year over year, with a 50 percent copper tariff in effect since August 2025 and a projected global deficit near 150,000 tons. Switchgear is worse: small and mid-size contractors report panel lead times of 16 weeks or more, medium-voltage gear is effectively sold out through 2028 in many channels, and transformers quote around 128 weeks. A fixed-price bid signed today carries commodity and schedule risk the contract may not price.

WHAT THE NUMBERS SAY

THE COST, SOURCED.

The cash twist

OEMs now require 10 to 30 percent deposits to hold production slots. That deposit leaves the sub's account years before the equipment bills.

WHAT THE TRADE PRESS SAYS

THE SAME PROBLEM, WRITTEN UP.

If you're not ordering electrical equipment 12 to 18 months before you mobilize the site, you're already behind.

Terrapin CG, 2026

Many GCs are still planning programmes as if electrical gear can be procured in 8 to 12 weeks. Part of your role as the electrical contractor is to educate the GC about supply realities, professionally, early, and in writing.

Electronate, 2026

WHAT THIS TRADE SHOULD EARN

THE NUMBER TO MEASURE IT AGAINST.

Electrical contractors run about % net profit at $1M to $5M, rising to roughly 12% at $5M to $10M. The CFOS target at $1M to $5M is11%, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.

Gross margin over the same bands runs % to 27%, against a CFOS target of 11%.

Full electrical benchmark bands by revenue

WHAT CONTROLS IT

THE SYSTEM THAT FIXES THIS.

Working Capital System

The balance sheet figures a bank and a surety underwrite off.

How the Working Capital System works

COMMON QUESTIONS

FREQUENTLY ASKED.

Two ways. Deposits of 10 to 30 percent are now standard to hold a production slot, which is cash out years early. And gear quoted at 16 weeks to 128 weeks means stored-materials billing and early buyout language have to be in the contract, or the contractor finances the wait.
On any fixed-price work crossing more than a quarter, yes. Copper moved 24.75 percent in a year and tariffs added 50 percent on top; a bid without an escalation or tariff clause is an unhedged commodity position. Index the clause to a published copper reference and date-stamp the bid basis.
Electrical contractors at $1M to $5M net 7.5 percent on average, rising to 9.5 percent by $25M to $50M; the CFOS target at $1M to $5M is 11 percent. Electrical carries the highest gross margins of the site trades, which means the gap to target usually sits in overhead and AR, not in the field. Every net profit figure here is stated before taxes, the same basis CFMA reports on, so the two are directly comparable.
Three tiers, and which one you are in depends on how much of the work you want off your desk. Core is where you stop guessing: job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a monthly meeting that ends in decisions, while your bookkeeper keeps doing the books. Executive is where you stop touching the books, because we run the bookkeeping and the controllership as well. Strategic is where every job shows its margin while it is still running, because the job costing and WIP platform is set up and managed for you. No payroll. No scope gaps.
Sixty days. We migrate your books back to the start of your last taxable year, set up ControlQore, and build your job costing structure from scratch. Fully operational in two months.
WHAT THIS TIES INTO
Josh Luebker, The Construction CFO
Josh Luebker
FRACTIONAL CFO · THE CONSTRUCTION CFO

Former commercial project manager and master electrician: 150+ projects worth $2.1B combined, from $50,000 to $300M. Now fractional CFO to commercial subcontractors.

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