Has the US security market recovered from the pandemic? The answer is definitively yes, according to a recent survey released by the Security Industry Association (SIA).
first struck the U.S. in January 2020 and has adversely affected various industries, including security. A year-and-half after, has the US security market recovered from the pandemic? The answer is definitively yes, according to a recent survey released by the Security Industry Association (SIA).
The US economy is heating up, now that the worst of the pandemic is seemingly over. According to the Conference Board, the US real GDP is expected to grow 6.6 percent this year from 2020. The board cited increased consumer and government spending as some of the growth drivers.
Is this bullish sentiment reflected in the US security market as well? SIA’s latest Security Market Index provided some insights. The index, published every two months, surveys security professionals on the current status and future expectations of the security industry.
For the June edition, the Security Market Index stood at 67. It was higher than 54 for April and 44 for February. Given SIA’s own definition that an index above 50 indicates “conditions within the industry are largely positive and that security industry professionals are predominantly confident in their business outlooks,” the 67 score points to a security market that is heating up.
Indeed, respondents’ views of the security industry are quite optimistic. According to the survey, 31 percent respondents rated current business conditions as “excellent,” 53 percent “good,” 11 percent “average” and 4 percent “fair.” None said business conditions were “poor.” This compares with the April edition where 26 percent of respondents said conditions were “excellent,” 43 percent said “good,” 23 percent said “average,” 6 percent said “fair” and 3 percent said “poor.”
As for the near term, most security professionals were upbeat. 93 percent said within the next three months, business conditions would be either “much better” or “a little better.” 4 percent said no change, and 2 percent said conditions would be worse. This compares with April when 85 percent expected improved conditions and 11 percent expected things would remain the same.
Increased number of employees or hours worked
It should be noted that the index is made up of six components: number of employees or hours worked, marketing spending, product production/service output, capital equipment spending, R&D spending and new orders/new contracts. For the most part, participants responded positively to each subcategory.
Take number of employees or hours worked, for example. The June survey shows 73 percent of respondents reporting an increase in the number of employees or hours worked. 24 percent said the numbers remained the same, and no one reported decreases. This contrasts with the April survey in which 63 percent reported increases and 34 percent reported consistency.
In terms of marketing spending, 60 percent of responded surveyed in June reported increases in marketing spending, while 9 percent reported a decrease, and 29 percent said spending remained the same. This compares with the April report where 46 percent of respondents reported an increase in marketing spending, while 6 percent reported a decrease and 40 percent reported consistency.
Positive sentiment by video surveillance players, SIs
By sector, the survey finds upbeat sentiment in the video surveillance
sector. The Security Market Index for the video surveillance market stood at 69 in June, compared to 63 in April and 45 in February. 40 percent of video surveillance professionals rated current business conditions as “excellent,” while 60 percent gave a “good” rating, with no one saying conditions were “average,” “fair,” or “poor.” This compares with the April figures where only 33 percent in the sector said conditions were “good.”
For security systems integrators, things were looking good as well. The June index for SIs stood at 59, the highest since before COVID and higher than 44 in April and 33 in February. 29 percent said business conditions were “excellent,” 57 percent said “good” and 14 percent said “average.” This compares with April when 33 percent said excellent, 33 said good and 33 said average.
Market to remain upbeat in the short term
When asmag.com did Security 50
in November last year, many US SIs and consultants gave downbeat assessments of the industry. The June SIA survey suggested anything but, indicating security players mostly have walked out of the shadow of COVID. We can reasonably conclude, then, that the US security market should remain bullish and upbeat for the months to come.