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New Industry Study Shows Us Where We Stand




Last week’s history-making presidential election has created euphoria among much of the general populace but despair for much of the business community. Regardless of where your allegiance lies, I think most would agree it’s a fresh start for America in which we will navigate some uncharted territories. We are embarking on a journey of hope and uncertainty, and it’s anybody’s guess which way the pendulum will swing. For our industry, it is a time when people are searching harder than perhaps ever before for insightful market data to help steer them through the dark abyss.   

Each year, SECURITY SALES & INTEGRATION conducts its annual Installation Business Report (IBR) — a comprehensive industry-wide statistical analysis of the current state of the electronic security industry. This research anchors SSI’s yearly buyers’ guide issue, which for 2009 has been renamed The Gold Book. I urge you to check out that publication, a reference that for years has been relied on by security professionals, investors, the media and academia as the leading source of aggregated industry information.

The annual fact book and directory ships to subscribers for free with the December issue or is available on our Web site for $35 (a bargain!). This year it has been retooled to include even more original industry research and features to augment contact info for hundreds of our trade’s most trusted and respected suppliers, service providers, and associations, a 2009 events calendar, and much more.

The bulk of the IBR is also available in the Statistics section of SSI’s site; however, what you’ll find there now is 2007’s results. The latest study will not be posted until next month. But as a loyal reader of Under Surveillance I think you are entitled to an advance peak, don’t you? Here goes …  

Overall, the results of the 2008 study reveal what most of us have suspected and, in many cases, directly absorbed the brunt of — slowed growth and busted budgets.

The housing market collapse inflicted the greatest damage to residentially focused providers, but few have remained unscathed by the subsequent banking crisis. This is reflected throughout the IBR as gross revenues were estimated to grow only 3 percent in 2008 — the most bearish projection in more than 10 years. The average number of access control, intrusion, fire and video systems installations and prices charged (except fire) were off across the board. As a result, many operators downsized and those who held onto their jobs were fortunate to see any pay increase.   

What makes this all even more disconcerting is that since this study is conducted prior to the fourth quarter, the 2008 figures are estimates — projections generated that do not necessarily indicate the full magnitude of the financial institutions freefall, Wall Street rollercoaster ride or impact of the election. That may explain why 2-percent more of respondents expect to earn at least $1 million in 2009 as they did in 2008. It may also prove overly optimistic because last year dealers/integrators overestimated that metric by 11 percent.

Still, it’s not all doom and gloom. Some of the encouraging IBR findings include a 25-percent rise in IP camera installations, 36 percent of which are megapixel; virtual freeze in net attrition rates; $2,700 rise in commercial fire projects; overall increase in commercial jobs (vs. reductions in residential and industrial); and, for general managers, an 8-percent increase in salary.

The security industry may not be immune to widespread recession, but it is certainly better positioned to weather the storm and more resilient than most. So work smart and keep your eyes and ears open for ways to save costs, increase profitability, and maximize efficiency. If you own or operate a business, also keep morale in mind as employees are justifiably worried and happy workers are productive workers.                     

As always, thanks for reading.

Scott Goldfine

Editor-in-Chief

SECURITY SALES & INTEGRATION


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