NSCA Report Assists Integrators With Construction Sector Forecasting

CEDAR RAPIDS, Iowa — The National Systems Contractors Association (NSCA) has released a new tool that tracks new construction starts and renovations in the commercial buildings sector to help electronic systems integrators find new business opportunities.

The organization released the NSCA Electronic Systems Outlook report at the request of member companies that wanted to prepare business valuations. The report breaks out construction data by markets and systems and indicates that the construction community has experienced growth and improvement in new construction, renovations, repairs and retrofits. Construction put in place improved by 7.5% in 2012 and the forecast total for construction in 2013 is $913 billion, according to the report.

Data presented in the inaugural report reveals that electronic systems are increasing in total volume, but showing a slight reduction in percentage of total overall construction dollars. NSCA expects that 5.5% of total construction will be spent on electronic systems, down from 5.7% at the end of 2012. The forecast also indicates an increase of roughly $1 billion spent as compared to the $19.3 billion spent in 2012. 

“For years, we’ve been following commercial construction reports,” NSCA Executive Director Chuck Wilson says. “We found that the electronic systems industry correlates with these trends. A lag time of 12 to 18 months is typically when a systems integrator will recognize revenue from their scope of work associated with new construction put in place.”

The report will allow systems integrators to benchmark against their own sales numbers. The growth indicators can be used to determine incentive programs, reveal new markets with potential, and appropriately distribute resources.

Wilson suggests electronic systems contractors share information from the report with financial advisors and lenders to prove the stability of systems integrators in the marketplace.

“The more familiar they become with our scope of work, the more likely they are to embrace the technology and therefore invest in our member companies as a viable risk,” he says.

The summer 2013 edition of report examines the current year, with the first six months of the forecast based upon actual construction put in place. The winter 2013 report will serve as a projection for 2014. Moving forward, NSCA will release the report biannually.

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