2019 Installation Business Report Reveals Security Contractors’ Concerns, Industry Profits & More
SSI’s 2019 survey of electronic security and fire contractors includes new installation figures, profit reports and other statistics on installing dealers and integrators.
This year will be the final edition of Security Sales & Integration’s annual Gold Book. Not to worry too much as much of the content and information that has for decades been carried in these pages will likely still be represented at various junctures here online, although the style of presentation will differ.
Two elements that will live on in print for the foreseeable future are the industry statistics, broken out into “Deep Dives” throughout the year, and vendor corporate profiles, which will run in the April issue.
Why is the Gold Book going the way of the dodo bird? Although it did hang in there quite a while, the publication’s utility was undermined by the Internet, with its fate sealed by the proliferation of mobile devices that connected people with the world from anyplace at any time.
It’s a similar arc to the Yellow Pages and other commercially produced phonebooks, along with the dwindling page count to boot.
The Gold Book began life as the Security Sales Buyer’s Guide (remember how popular those were?) — functioning primarily as a reasonably comprehensive directory of security industry suppliers along with their specialties and contact information.
Also including market statistics and other key info (even for a time a summary of past magazine articles by topic and year/month), for many years it was one of the industry’s most valued and referenced publications. It was later renamed the Fact Book before receiving its present title around 10 years ago.
While the Gold Book rush has come to a close, unabated opportunities abound to stake your claim in the electronic security industry’s mine of riches.
Advances, awareness and demand for new technologies, products and services associated with video, access control, monitoring, integration, automation, Cloud, IoT, AI, 5G and more across residential, commercial and industrial markets along with steady intrusion and fire business are propelling security to ever-deepening levels of penetration.
Those trends and more are brought to life by the results of SSI’s annual Installation Business Report (IBR). You can whet your appetite with the more than two dozen factoids presented in the overview below, or view the full results in the 2020 Gold Book.
As you can see, the news is mostly good. Among the positive signs are generally upbeat responses concerning revenues, projections, margins and newer products/services. Plus, crime continues to plummet; however, the fallout from fires inched upward.
Despite that, it seems owners, operators and managers of security dealer/integrator firms have more on their minds of late. It doesn’t help that, according to the IBR, attrition rose significantly. Apart from that, looking at their biggest concerns (asked as part of the IBR and often included in this column), while the technician shortage remains No. 1, every other issue was rated with more urgency than in 2018.
Security Contractors’ Top 10 Concerns
Rating (scale = 1-5, 5 highest concern)
1. Technician shortage (3.62)
2. General operating/business costs (3.41)
3. Lack of training (3.28)
4. Government regulation (3.24)
5. Direct competition from manufacturers (3.22)
6. Competition from other security companies (3.21)
7. Economic conditions (3.12)
8. Verified/No police response (3.11)
9. Acceptance of new technology (3.04)
10. Manufacturer consolidation (2.98)
Other concerns receiving mention: verified/no police response (2.59); economic conditions (2.57); competition from network/IT companies (2.5); association representation (2.35); competition from sound/video contractors (2.35); competition from electricians (2.28).
On a scale of 1-5 with 5 being the greatest level of concern, nine issues were scored by respondents at a 3 or higher as compared to just three a year ago (see list, right).
A third of respondents rated technician shortage at the maximum 5. One of the most significant shifts was general operating costs, going from No. 4 to No. 2 with a rating rise of nearly half a point.
Now, as a bonus for reading this far, here are a few tidbits not included in the IBR results: 21% of dealers are selling DIY products; 41% are offering video verification products/services; smart locks are included in 31% of access control projects; 59% of video surveillance projects include low-light cameras and 14% include thermal imaging; commercial fire systems average 25 horns and 22 strobes; and 41% of responding dealers indicated they are involved in the sales and/or installation of gunshot detection systems.
I hope you find this Gold Book swansong to be a purposeful tool that helps lead you to new security horizons. As always, I wish you, yours and your company the very best throughout the New Year.
- Residential business (38%) overtook commercial activity (36%), which came in 11 points lower than a year ago; but the biggest mover was large industrial (26%) as it more than doubled from the previous survey
- Gross revenues are estimated to have increased 4% from 2018 to 2019, and another 11% gain is projected for the coming year
- Profit margins rose overall, with fire (19%) and video (13%) leading the way; access was flat and intrusion dipped by 6%
- Three in four alarm companies (75%) have been in business 11 years or longer
- The highest percentage of operators (44%) have just one office, while 10% have 13 or more locations
- Almost 40% more installing companies expect to earn $10 million or more compared to 2018, and 27% fewer anticipate taking in less than $100,000
- The “sweet spot” for the typical security contractor remained in the $1M-$4.99M annual gross revenues bracket, with nearly a quarter (23%) falling within those parameters
- Disarming/entering and arming/exiting account for 39% of all false alarms
- Regarding 2018 false fire alarm activations, malicious calls and system malfunctions increased 22% and 18% respectively
- Nationwide during 2018, violent crime declined 3.3%, and property crime almost doubled that drop at 6.3%
- Offices, homes and industrial facilities account for a third (33%) of the entire access control market
- Dealers are averaging $24,934 per access control project (14 doors X $1,781 per door), way up in both number of openings and price per opening as compared to 2017
- The average price customers paid for a residential intrusion alarm system increased by $190 (15%) in 2018
- Average number of annual video surveillance installations per dealer/integrator climbed by 15 projects as compared to 2018’s 176
- Alarm companies averaged 21 cameras per commercial video surveillance project in 2019, a 17% upswing following last year’s 22% shortfall
- The average commercial fire-only installation costs $20,784, up $2,957 (17%) from 2018
- Fire system installations leaped to their second-highest average of the past five years in 2019 with a 32% rise; at 19%, residences is the leading market
NOTE: The 2019 Installation Business Report tabulations are based on responses from all levels of operators — small, independent dealers to large, national mass marketers. Nearly 200 electronic security contractors participated in the survey.
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