TULSA, Oklahoma, Oct. 15, 2019/Petroleum Equipment Institute/ -- The number of surveyed PEI distributors and contractors who said they are actively involved in electric vehicle (EV) charging doubled in 2019, said Rick Long, executive vice president and general counsel at PEI.

“‘Not yet involved but planning to’ is even more impressive: from 15.8% last year to almost 32% this year, so a doubling in the number of our distributor and contractors who said ‘we are going to get into this market,’” Long said. “That is a huge change. That is a huge shift, and that is a significant opportunity.” 

The 2019 EV development was the most significant change from 2018 PEI membership survey results, Long said. He also shared industry truths: some people label petroleum “the enemy,” EV penetration is growing, consolidation among both distributors and manufacturers is accelerating, and there are generational shifts in ownership and management.

“Biggest challenges for distributors and contractors — shocker: shortage of skilled labor,” Long said.

Surveyed distributors and contractors listed their biggest challenges as the labor shortage (80.6%), manufacturer relationships (41.8%), EMV procrastination (28.4%) and profit margins (25.4%).

On a scale of 1 to 10, surveyed distributors and contractors ranked current business conditions a 7.22, with commercial work, construction and aging underground storage tank (UST) system upgrades performing especially well. Rising trends among distributors and contractors, Long said, include: emergency generator fueling systems; lube, lift and car wash; and nonretail equipment upgrades and replacements.

Manufacturers rated 2019 a 7.27, citing new store construction (30%), diversification (21%) and UST system upgrades (20%) as the year’s bright spots. They said their biggest challenges are a shortage of skilled labor (45%), outdated plant infrastructure (23%) and customer consolidation (22%), Long said.

“We deal with a lot of other associations,” Long said. “Any association that we encounter and interact with, they, too, are talking about the shortage of skilled labor, so that’s across the entire economy.”

More than 82% of surveyed distributors and contractors and more than 77% of manufacturers described themselves as extremely or moderately optimistic about their businesses during the next three years.

Long said 67.8% of distributors and contractors indicated they want to hire more employees in 2020. On the manufacturing side, the amount is 66.7%.

Long also discussed threats and opportunities in the fuel and fluid handling equipment industry. He said 2019 survey results show a bump in the number of PEI members who see a place for E15. In 2019, 3.2% of respondents said they expect a dramatic increase in nationwide E15 sales vs. 0% in 2018. In 2019, 61.9% of respondents said they expect a small increase in E15 sales vs. 37.3% in 2018.

Respondents in 2019 are less optimistic about the percentage of customers who will have completed EMV forecourt upgrades by the 2020 deadline. In 2019, respondents estimated 59.3%. In 2018, that number was 64.2%. Respondents in 2019 also said 21% of their customers have no intention to make EMV forecourt upgrades.

“It’s a bigger number than I would have thought,” Long said.

Long delivered his remarks Oct. 3 in conjunction with the 2019 PEI Convention at the NACS Show in Atlanta, the organization’s 69th annual convention and trade show.

A video of Long's State of the Industry is available here. Long's slides from the State of the Industry are available here.

Founded in 1951, PEI is composed of more than 1,600 companies engaged in manufacturing and distributing equipment used in the fuel and fluid handling industry. Members are located in 50 states and 81 countries. PEI, headquartered in Tulsa, Oklahoma, is the leading authority and source of information for the fuel and fluid handling equipment and services industry. For more information, visit www.pei.org.