NSCA has released a new tool, available free to members, that provides indicators of new business opportunities by tracking new construction starts and renovations in the commercial buildings sector.
The NSCA Electronic Systems Outlook, which breaks out construction data by markets and systems, indicates that the construction community is experiencing growth and improvement in new construction, renovations, repairs, and retrofits. Construction put in place improved by 7.5 percent in 2012. The forecast total for construction in 2013 is $913 billion, which is an improvement.
According to the data presented in this inaugural report, the systems integration industry is headed for better times. Trends found in the Key Economic Indicators section of the NSCA Electronic Systems Outlook correlate with rising interest rates and inflation. Although the nation is seeing increases in Consumer Price Index (CPI) and Consumer Confidence Index (CCI), along with decreasing unemployment rates, there is still spending uncertainty due to the national deficit and recent economic conditions that are keeping interest rates and inflation from typical increases.
Electronic systems are increasing in total volume, but showing a slight reduction in percentage of total overall construction dollars. NSCA expects that 5.5 percent of total construction will be spent on electronic systems, down from 5.7 percent at the end of 2012. The forecast also indicates an increase of approximately $1 billion spent as compared to the $19.3 billion spent in 2012.
“For years, we’ve been following commercial construction reports,” said NSCA executive director Chuck Wilson. “We found that the electronic systems industry correlates with these trends. A lag time of 12 to 18 months is typically when a systems integrator will recognize revenue from their scope of work associated with new construction put in place.”
Systems integrators can use the report to benchmark against their own sales numbers. The growth indicators can be used to determine incentive programs, reveal new markets with potential, and appropriately distribute resources.
This forecast data can also be shared with financial advisors and lenders to prove the stability of systems integrators in the marketplace.
“The more familiar they become with our scope of work,” Wilson said. “The more likely they are to embrace the technology and therefore invest in our member companies as a viable risk.”
The key economic indicators that play a vital role in determining spending confidence, inflation (cost of goods), and interest rates will be featured in each NSCA Electronic Systems Outlook.
“Our members have been asking for these types of reports to help prepare business valuations,” said Wilson.
The summer 2013 edition of report examines the current year, with the first six months of the forecast based upon actual construction put in place. The winter 2013 report will serve as a projection for 2014. This report will be released biannually, each summer and winter.
The NSCA Electronic Systems Outlook is free for NSCA members. For non-members, the forecast can be purchased for $349. Non-members can also become NSCA members for $595 and receive this report as part of their membership, which also offers updates on government affairs issues, discounted registration for training and educational events, access to monthly industry webinars, and more.
Members can download their copies at www.nsca.org/research using their member log-in.