Industry confidence rebounding

While the U.S. begins to pull itself out of quarantine (the New Yorker cover sums it up perfectly), we here at Security Systems News have been hearing from all facets of the industry – dealers, systems integrators, consultants, manufacturers, end users – that things are starting to open up again, as new business pipelines (bad choice of word considering the recent Colonial Pipeline incident) begin to get back to pre-pandemic levels, and better, for some.

As Eagle Eye Networks Founder and CEO Dean Drako told SSN in a recent interview, he is bullish on business for 2021, with his company posting a record quarter in terms of sales for Q1 2021.

“It appears that the U.S. is coming out of the COVID doldrums, the lockdown, as our vaccination numbers get high and people get back to a much more normal life,” Drako pointed out. “I noticed traffic kicking back up in Austin to almost normal levels, so I think what we are seeing in this first quarter of 2021 is some of that pent-up demand releasing, and I do think we are going to see more of that trend as the year progresses.”

In addition to Eagle Eye, many companies published gains this past quarter, including record sales for Napco, and gains for ADT Commercial, for example.

SIA’s Market Index Rising

The Security Industry Association’s (SIA’s) latest Security Market Index (SMI) reflects that confidence, as the overall SMI rebounded this month to 54 after dipping down to 44 in February. An Index above 50 indicates that conditions within the industry are largely positive and that security industry professionals are predominantly confident in their business outlooks. 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.

Within the next three months, 85 percent of security professionals believe business conditions will be either “much better” or “a little better,” 11 percent expect no change in business conditions, and 3 percent expect them to be worse. In February, 75 percent of respondents expected improved conditions in the next three months, 19 percent expected conditions to remain the same, and 6 percent expected conditions to be worse.

This month, 63 percent of survey respondents (compared with 44 percent in February) reported an increase in the number of employees or hours worked, while 34 percent said the numbers remained the same and no one reported decreases. An equally impressive 46 percent of security professionals (up from 19 percent in February) reported increases in marketing spending, while 6 percent reported a decrease, and 40 percent said spending remained the same.

Interestingly, in the National Association of Manufacturers’ Q1 2021 Outlook Survey, manufacturers reported an increase in optimism for the third straight quarter. The survey found that 87.6 percent of manufacturers felt either somewhat or very positive about their company’s outlook. The number bounced back from the 33.9 percent reading in the second quarter of 2020, which was the worst since the Great Recession.

Systems Integrators Rebound

The segment-specific April index for security systems integrators is 44 this month — the highest reading since before the COVID-19 pandemic.

When asked how they would rate current business conditions, 33 percent said “excellent,” 33 percent said “good,” and 33 percent said “average.” In three months, 100 percent of integrators surveyed expect business conditions to be “a little better.”

“We expect Q2 to be about 15 percent above Q1,” said one integrator responding to the April survey.

It is good to see business booming again, activities resuming,, and in-person conferences starting back up again, as the world steps out of the darkness and into the brave new world post-COVID.