John Engel: Yes. Well, we’ve got three really — parts of that business, Industrial, Construction and OEM comprise our EES business. And I’ll start with Industrial because up mid-teens, very strong. We’re seeing a large number of mega CapEx projects. We’ve got a record backlog. That backlog includes construction, but it also includes big industrial projects that we do with the end-user customer. The secular trends are very strong and intact, especially reshoring. Remember, we sell to 90% of the Fortune 500 companies directly. I can tell you, all our customers are looking at reshoring, nearshoring as supply chains begin shifting structurally back to North America. I believe fundamentally — and we’re seeing this. We’re in the early innings of a multiyear Industrial up cycle or even super cycle.
So Industrial, strong momentum theme, that’s in EES, again, double digit growth in the quarter. Moving to Construction, up mid-single digits in the quarter, both in US and Canada, record backlog, as I mentioned. The secular trends give us great confidence. Remember, we’re non-resi essentially, very little residential construction exposure, but the secular trends of electrification, IoT and automation. Again, the reshoring, very positive drivers of our business. And it’s important to understand, too, the big infrastructure spending and investments that have been approved through various bills in Congress, that’s not in our numbers yet. That’s not driving the market yet. So that’s 2024, 2025 and beyond. So really solid start, I think, on construction.
It’s also important to remember that construction overall for the company is only 17% of our total sales now. So the cyclicality of construction is only 17% when you look at the balance of our business, just incredibly strong secular growth driving most aspects of the business. And then for OEM, that’s our value-added assemblies business. That’s traditionally been a lumpy business. No structural issues. It’s just — it has been lumpy over time if you were to look at that historically. We remain bullish on OEM ultimately and our value added, though, capabilities. Because when you look at the fundamental drivers for Industrial, they also apply to OEM. When you think about OEM being value-added assemblies that feed a variety of end markets, including Industrial.
So that takes you through the pieces, Deane.
Deane Dray: Thank you.
Operator: The next question is from Sam Darkatsh, and he’s with Raymond James. Please go ahead.
Sam Darkatsh: Good morning, John. Good morning, Dave. How are you?
John Engel: Good morning, Sam.
Sam Darkatsh: A couple – two, three questions, I suppose. First, I’m trying to reconcile your flat sequential backlogs with the commentary for some of your primary suppliers. Some on Eaton as an example was talking about their backlog sequentially being up high single digit sequentially. Are there certain mega products that your vendors are seeing that are not going through distribution per se that they’re more vendor direct, or what else might explain that delta?
John Engel: I mean, the short answer is no, Sam. And so I think what I’d suggest is take a look at the — look across the entire electrical, I’ll call it, channel or value chain space. There’s a number of suppliers. They have different performance levels, and there’s a number of distributors. You look at us versus our competitive period, we think we had a very strong quarter, outperformed the market. You look at the suppliers, there’s a range of formats. Again, I think what’s most important is remembering that our suppliers — our purchases are our suppliers’ sales. And I’m not going to speak to a specific supplier, with respect to how they measure order — kind of their front-end pipeline or order book. I can tell you what our pipeline looks like.
It’s at record levels. It continues to expand. Our bid activity levels are very strong. And again, we remain bullish on the secular growth trends as they impact the construction end market vertical and our mix, which is non-resi predominantly.
