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Custom-installation revenue is going up, and the biggest gains will come in distributed audio, distributed video, lighting controls and home theater, according to CEDIA's latest member survey.
The vast majority of installation companies surveyed also said they'll be hiring in 2004 to keep up with projected business growth.
The association based its results on responses from 282 member installation companies based in North America, or 19 percent of its North American installer members. That's up from the 217 members who responded to the 2002 survey.
This year's 282 respondents answered one or more of six weekly surveys taken during the June-August period. Of those respondents, 178 completed all six surveys.
Business climate: This year's respondents were a pretty optimistic bunch, with 53 percent of the 282 surveyed saying their business is improving moderately. Another 18 percent described their business as improving greatly (see chart 1). Only 8 percent said business was getting worse or much worse.
Expansion plans: The turnaround has prompted the majority of companies (73 percent) to plan for a 2004 increase in the size of their staffs (see chart 2). Many of the new hires are likely to come from the long-suffering IT industry, CEDIA executives told TWICE.
Among the companies in a hiring mood, about 37 percent plan to hire two more staffers, but 27 percent expect to add three to five more employees. Almost 8 percent plan to hire more than six.
On average, each respondent currently employs an average of 15.3 people, though the median company employs seven. Among the employees, 85 percent are full time.
Though most companies plan to add staff, only 16 percent plan to increase the number of their business locations in 2004, and 83 percent of those installers plan to add only one new location.
Currently, 87 percent of the 282 respondents operate out of one location, 8.5 percent operate two locations and only 4.6 percent run three or more locations.
Growth categories: Paralleling the majority's plans to add staff, a majority of respondents expect 2004 growth in every key category except security and telecom (see chart 3). Growth expectations were highest in home theater, followed by distributed audio, lighting, networking, audio/video, and distributed video. About 25 percent expect growth in security, and slightly more than 40 percent expect telecom growth.
Among installers projecting growth, expected gains hit the double-digit percentage range in all categories, with lighting controls coming out on top with an expected average gain of 31 percent. That was followed by security, home networking, home theater, distributed audio, audio/video, distributed video and telecom.
Profit contributors: Lighting also happens to be a significant profit-margin generator for the responding installers. In terms of dollar profit margin per job, installers on average ranked lighting only behind home theater and distributed audio. Lighting margins exceeded the margins on A/V, distributed video, telecom, home networking and security.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.