The Security Industry Association (SIA) released its Security Market Index for January, and the results show that overall confidence in the security industry is holding level this month, as general optimism about current business conditions and steady increases in new product sales, introductions and production keep the Index at 65, the same as in Nov. 2018.
According to the Index, any Index higher than 50 indicates that conditions within the security industry are largely positive and that security industry professionals are predominantly confident in their business outlook.
In January’s Index, 35 percent of security professionals rated current business conditions as “excellent,” and 58 percent said they were “good.” Only 7 percent said conditions were “average” and no SMI respondents rated current conditions as “fair” or “poor.” This is slightly lower than in November, when 46 percent of respondents said conditions were “excellent” with 38 percent calling them “good.”
The SMI measures the current status and future expectations of security industry executives through a select survey of SIA members. The Index’s goal is to provide a macro-view of confidence levels in the security industry every two months while closely examining nine specific business measures: number of employees or hours worked, marketing spending, product production or service output, capital equipment spending, product inventories or service backlogs, R&D spending, new product or service introductions, product or service sales and new orders or contracts.
“In the majority of these areas, most industry professionals surveyed are reporting increases,” stated the Index. “Seventy-three percent of SMI respondents said they are increasing their number of employees or hours worked, compared to 63 percent in November 2018. A year ago in December 2017, 72 percent of SMI respondents said they were increasing the number of employees or hours worked in their businesses.”
The Index went on to state that product production and new introductions were some of the biggest increases this month, with 76 percent of SMI participants reporting increases in product production or service output, compared to 70 percent in Nov. 2018, and 77 percent reported increases in new product or service introductions, compared to 64 percent in November.
Within the next three months, 88 percent of respondents believe business conditions will be either “much better” or “a little better.” Twelve percent expect no changes to business conditions, and no respondents expect conditions to be worse.
“This is slightly less optimistic than in November 2018, when 92 percent expected improved conditions within three months, but fairly close to the December 2017 levels, when 86 percent expected improvement in three months’ time,” the Index stated.
Another large takeaway from the Index is an increase in confidence in video surveillance professionals. The video segment itself received a Security Market Index of 93, much larger than the overall January SMI of 65. Seventy-five percent of surveillance professionals consider current business conditions “excellent," and all of the surveillance professionals surveyed believe business conditions will be either “a little better” or “much better” in three months’ time.
In Dec. 2017, the sector-specific index for video was only 67; 33 percent of respondents expected “much better” conditions in three months’ time, and 50 percent expected “a little better” conditions. This increase in confidence could have to do with the fact that sales revenue from standalone network video surveillance cameras reached $966 million globally in 2017, and IHS Markit estimates that in 2018, that will have grown to $1.1 billion.
Security consultants, however, are not as optimistic about the state of the industry. Their sector-specific SMI was only 46; 17 percent believe current business conditions are "excellent" and 66 percent believe conditions to be “good.”
All of this and so much more is explained in the SIA’s Security Market Index, available to all SIA members here.The Security Market Index, a bi-monthly survey and report, measures overall industry confidence in addition to specifics by executives’ product and service focus. A select group of top leaders, representing the SIA membership, is surveyed throughout the month of publication via a series of emails with a link to an online and confidential questionnaire.