SDM 2019 Security Industry Forecast: Channeling Momentum Into Opportunities
Results of SDM’s 2019 Industry Forecast Study show that security integrators grew their total annual revenue by an average of 15 percent last year; they expect that momentum to bring them face-to-face with prosperous opportunities in 2019, as long as the economy stays strong.
Security integrators expect their stellar 2018 performance to continue into 2019, according to results of SDM’s 2019 Industry Forecast Study, a report published annually by SDM since 1982. Last year saw double-digit growth in both total annual revenue and recurring monthly revenue (RMR) for integrators and dealers who participated in the study. Their total revenue increased by an average of 15 percent, while RMR grew by an average of 21 percent.
The security industry expects 2019 to be just as rewarding. Nearly three-fourths of integrators anticipate their total annual revenues will continue to grow and — among those who foresee expansion — the expected average increase is 18 percent.
“In 2018, we’ll have increased our total annual revenue by approximately 15 percent,” says JC Gonzalez, co-founder and general manager of Dallas-based HomePro, a company that specializes in home technologies for new residential construction in Texas. “And in 2019, we’re looking to grow by about 20 percent,” he emphasizes.
“For 2018, it’s been a phenomenal year. We’ll finish with over 20 percent growth,” says Larry Simmons, vice president of corporate governance for Tech Systems Inc., an innovative security integrator based in Duluth, Ga. “If we look ahead to 2019 … we anticipate it’ll be somewhere between 10 percent and 15 percent growth,” Simmons forecasts.
“This year, we’ll do right around $120 million in revenue. We will grow approximately 7 percent this year over last year; and for next year we’re budgeting top line growth of 8 percent,” says Brian Duffy, chief operating officer for Per Mar Security Services, Davenport, Iowa, featured on this month’s front cover. Per Mar is a traditional security dealer with a central station, which serves a wide range of customer markets, but also has a manned security division and a background investigation division. (To read more about the experiences of each of these security professionals, see the sidebars throughout this story and online, “The Panel Speaks.”
Expectations may be tempered by reality, however. The economy and capital spending by business are the top two factors security dealers and security integrators think will have the greatest impact on sales of security systems by their companies in 2019, according to SDM’s study, and some economic forecasts expect growth to slow slightly this year. Gross domestic product (GDP), which measures the value of goods and services produced, is a reliable measure of economic performance. According to a GDP economic forecast by Kiplinger, we can “expect 2019 growth to slow to 2.7 percent from 2.9 percent. Although Americans will keep spending at a healthy clip because of higher wages and low unemployment, the tight labor market will make it difficult for businesses to expand.”