SIA market index: Industry confidence begins to rebound

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07/03/2018

SIA recently released its July 2018 Security Market Index (SMI), which showed industry confidence rebounding after a slight drop in confidence in May.

“After a rocky spring, confidence within the security industry seems to be recovering slightly,” according to the report. “Improvement in a variety of areas, including product production, new product introductions and new orders, led to a July 2018 Security Market Index (SMI) of 65. Any index above 50 indicates that conditions within the industry are largely positive and that security industry professionals are largely confident in their business prospects. The May 2018 SMI was 55, and the March 2018 SMI was 72.”

Special focuses of the July 2018 edition of SMI include:
•    Confidence in the surveillance segment climbing, cautiously
•    Slowing growth for integrators
•    Access control professionals broadly positive moving into summer
•    Consultants holding steady, but with little improvement
•    A bonus feature on government spending and security

According to SIA, the majority of security professionals surveyed for the July 2018 SIA Security Market Index “are at least cautiously optimistic about the prospect of increased security spending this year as a result of the recently enacted Omnibus Appropriations Act. Nearly a quarter of SMI survey respondents were ‘very optimistic about increased spending.’”

Many SIA members cited the poor timing or late release of the FY18 federal budget as the cause for “less than ideal current business conditions” in May.

“After the Omnibus Appropriations Act was enacted, however, more projects and new orders started trickling down, said one video surveillance professional,” the report noted. “One security systems integrator noted, however, that ‘if we start a trade war, (mess) up the immigrant inflow and keep proposing up coal, we’ll not continue the economic growth.’”

Overall, most security professionals surveyed for the July 2018 SIA Security Market Index (surveyed between June 1 and June 15, 2018) consider current business conditions to be either “excellent” (45 percent) or “good” (35 percent).

The majority of security industry professionals surveyed for the July 2018 Security Market Index cited increases in the number of employees or hours worked, marketing spending, product production, new product introductions, product or service sales and new orders.

For capital equipment spending, most (52 percent) said rates were remaining the same, but 48% said spending was increasing, which is improvement compared with May 2018, when only 34 percent were seeing increased capital equipment spending and 12 percent cited decreases.

For security systems integrators only 29 percent consider current business conditions to be “excellent,” compared with 45 percent of the SMI overall. A further 43 percent consider current conditions “good,” but 28 percent believe current conditions are either “average” or “fair.”

Overall, the integrator-specific Index for July 2018 is 59, down three points from its May 2018 level of 62.
   
Over the next three months, most integrators believe business conditions will be either “much better” (29 percent) or “a little better” (57 percent). This is a little more optimistic than the outlook from June 2017, when only 14 percent of integrators expected conditions over the next quarter to be “much better,” with 71 percent expecting “a little better” conditions.

Click here for the full report, including details on increasing confidence in the surveillance and access control segments, as well as info on security consultants, 75 percent of whom consider current business conditions as “excellent.”
 

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