Commercial Integrator + Security Sales Jan/Feb 2024 - 15

Down
Reason for Optimism
This year, the big picture is mixed,
although with plenty of reason for optimism.
Our survey respondents have a
fairly rosy view of the overall business climate,
with 32% describing it as very good,
32% saying good with room for improvement
and another 5% saying it's excellent.
A mere 5% of respondents describe the
business environment as challenging.
What's more, in response to a question
about total projected revenue for 2023,
78% of respondents project an up year versus
2022. In fact, 39% project they'll be up
11% or more. Moreover, when asked about
anticipated revenue trends in 2024, survey
takers are even more optimistic. More
than 80% of respondents are forecasting
an up year. And, in fact, 18% expect to see
revenue growth of 11% or more.
Fair
7%
Good with
Growth
Slowing
21%
Challenging
5%
Excellent
5%
sentiments. A majority of those respondents
rated their company's financial
health as good to very good, data that
actually shows improvement as compared
to the sentiment captured in late 2019. Integration
business owners aren't blind to
all the profitability challenges and moving
parts, LeBlanc emphasizes. But, he adds,
" Typical integrators still feel really good
about their company's financial health. "
Assessment of
current business
climate
Good with Room
for Improvement
32%
Very Good
32%
Considering Backlog
As noted, one way that integrators can
forecast the year ahead is to look at their
booked work for the coming months.
That's why, every year, we ask integrators
a question about their backlog. This year's
results actually flash a warning sign. Even
though 46% of integrator respondents report
an increase in backlog as compared
to the same time last year (including 25%
reporting a significant increase), another
41% report a year-over-year decrease in
backlog. In fact, the plurality response
(34%) is that backlog is down slightly. In
response to our question about which
types of projects are in respondents'
backlog, our integrators overwhelmingly
say acoustics, audio and AV projects, with
75% of survey takers indicating that those
projects are in queue. The next-closest
answer is digital signage, which 36% of
respondents have in their backlog. Some
other project categories (e.g., building
automation and control, life safety) barely
crack double digits.
That level of AV-centricity actually
Down
slightly
34%
significantly
7%
Up
significantly
25%
Project backlog
heading into 2024,
versus last year
Same
14%
Up slightly
21%
might help to illuminate why our research
is somewhat less bullish on backlog than
NSCA's own (through its Financial Analysis
of the Industry) is. " [Yours] is a highly
AV-centric response, " Chuck Wilson, CEO,
NSCA, says. (NSCA's mix, by contrast, is
closer to 50/50 between AV and security
integrators.) This perhaps reflects that
more AV-focused companies have less
backlog than more diversified integration
businesses do. Indeed, if you ask LeBlanc
and Wilson, insufficient booked work is
not a major problem for NSCA integrators
at the dawn of 2024, even as many
integrators have burned through the glut
of work they'd built up during the peak of
supply-chain woes.
" We have heard mostly positive things
from integrators about optimism related
to backlog, " LeBlanc
reiterates,
Tom LeBlanc, executive director, NSCA,
says that integrator optimism itself augurs
well for what the year ahead will hold.
" Usually, company owners are correct, "
he observes. " If they feel good going into
a year, it tends to be a pretty good year. "
Integrators, after all, can gauge how busy
they'll be by assessing their backlog versus
prior years' booked work.
It also seems as though our survey's
integrator optimism isn't a mere anomaly;
in fact, NSCA's biennial Financial Analysis
of the Industry captures exactly the same
Jan/Feb 2024 | Commercial Integrator+Security Sales & Integration
15
This year, the big picture is
mixed, although there is
plenty of reason for optimism.

Commercial Integrator + Security Sales Jan/Feb 2024

Table of Contents for the Digital Edition of Commercial Integrator + Security Sales Jan/Feb 2024

Commercial Integrator + Security Sales Jan/Feb 2024 - Bellyband1
Commercial Integrator + Security Sales Jan/Feb 2024 - Bellyband2
Commercial Integrator + Security Sales Jan/Feb 2024 - Cover1
Commercial Integrator + Security Sales Jan/Feb 2024 - Cover2
Commercial Integrator + Security Sales Jan/Feb 2024 - 1
Commercial Integrator + Security Sales Jan/Feb 2024 - 2
Commercial Integrator + Security Sales Jan/Feb 2024 - 3
Commercial Integrator + Security Sales Jan/Feb 2024 - 4
Commercial Integrator + Security Sales Jan/Feb 2024 - 5
Commercial Integrator + Security Sales Jan/Feb 2024 - 6
Commercial Integrator + Security Sales Jan/Feb 2024 - 7
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Commercial Integrator + Security Sales Jan/Feb 2024 - Cover3
Commercial Integrator + Security Sales Jan/Feb 2024 - Cover4
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/may2024
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/april2024
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/march2024
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/janfeb2024
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/novdec2023
https://www.nxtbook.com/emerald/CommercialIntegratorSecuritySales/septoct2023
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