2014 State of the Industry Report

And, the increase in 2013 was comparable to the performance by the industry over the past several years with a strong 13 percent increase in median income to $644,100. In 2012, the median income was $570,000, up from $541,000 in 2011. That means over the past two years, revenues have risen 19 percent. Pretty darn good comeback.

The data is tempered by the fact that the while the average integrator earned much stronger revenues last year, there are many fewer integrators serving the market since the heyday of 2005 to 2008, prior to the recession and the housing bust.

CE Pro’s own circulation data shows there are fully 20 percent fewer custom integration companies. At its peak, the median income for a custom integrator was $1.2 million back in 2007.

But a win streak is a win streak, and the data clearly reflects that the integrators who have adapted and survived are growing stronger and stronger. In the meantime housing and remodeling are gaining steam and hold the promise to help the industry grow even stronger. Indeed, integrators are optimistically predicting an increase of 7.1 percent in revenues in 2014.

In yet another signal of strength, the median number of employees rose dramatically from 4 to 7. That means integrators nearly doubled their personnel size in 2013 to handle the increased revenues.

In another development that bodes well for the industry, more integrators than ever now report earning some sort of recurring monthly revenue (RMR). In 2013, only 25 percent of integrators did not have RMR, down from 33 percent in 2011. Security monitoring and service contracts lead the way as the most common forms of RMR.

There were also some changes in how integrators acquired their products in 2013. For the past several years, an increasing percentage of products were purchased from distributors and online or brick-and-mortar retail. But in 2013, there was a swing back to buying factory-direct from manufacturers.

In all, 42 percent of products were bought directly, up from 29.8 percent in 2012. The big reason for that swing appears to be the adoption of electronic purchasing by manufacturers. A total of 36.6 percent of products are now bought via a manufacturer’s online portal. Another 21.2 percent are purchased via email. That means 57.8 percent of all products were bought electronically.

The median number of installations per company grew dramatically in 2013 to an average of 68 jobs. This means that fewer integrators are doing more jobs, for less money per job, to boost their revenues.

At least no one can claim they are not busy!

The average installation in 2013 was reported at $9,800, down from $11,700. That’s a 16 percent drop over the previous year. The difference-maker appears to be recurring monthly revenue. More integrators are now involved.

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2014 State of the Industry Report

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