Coming off a slow start to 2014, the fire alarm industry certainly ended the year on a high note. And it looks like 2015 will be another period of slow and steady growth for our market.
Of course, there is always some degree of risk, but all told it looks like 2015 will be a good year. There are several trends that point toward this gradual improvement:
Higher customer confidence indexes. Although we’re still in an improvement phase, customer confidence is the highest it’s been since pre-2008. For fire alarm dealers, that means the potential for increased revenue.
A stable GDP. Gross domestic product is forecast to hold steady at about 3 percent this year, which will have promising ripple effects throughout the entire economy, including construction.
Potential influx of infrastructure spending. The U.S. is poised to focus funds on infrastructure later this year, depending on several political factors at home and abroad. If the legislation goes through, that means more construction, likely throughout the country.
Growth in all the right areas. Construction in general is experiencing steady growth, especially when compared to last year’s slow start. The construction forecast for commercial buildings is in the high single digits, which is definitely a positive sign. For fire alarm installers, you can expect between 8 and 15 percent forecast growth in some of your strongest markets, including multi-family dwellings, hospitals, retail and education.
Improved construction employment. As the market in general improves, customers are investing in their businesses by adding employees, which is always a good sign for the fire alarm market.
Consolidation within the security industry. We’re continuing to see a trend of consolidation among installers, contractors and distributors, and that will likely continue through this year. The anticipated security spend is in line with this year’s construction forecast, which is also good news for anyone who works both the fire alarm and security ends of the market.
Planning Your Year
So, how do you make the most of this slow and steady growth trend? First, focus on the main growth drivers in the fire alarm market. Right now, these are the growth of wireless communication, the need for emergency communication and demand for advanced detection technologies. In addition, more central stations are requiring IP communication to prepare for the sunset of plain old telephone service (POTS) lines.
Another tack is to continue to develop your business around connectivity and IT. The Internet of Things (IoT) trend is just starting to take hold, and there will be a lot of opportunity around the trend of connected buildings and connected homes. Now is the time to get ahead of the game by familiarizing yourself with these devices and systems.
By most accounts, 2015 looks to be a period of steady growth for the fire alarm market. Here’s hoping the trends hold true in your area and make this a successful year for your business.
About the Author
Dave Pakech is the Vice President of Sales for Honeywell Fire Safety’s Security Equipment Distribution Channel, through which Fire-Lite Alarms, Honeywell Power and Silent Knight are sold. He joined Honeywell Fire Systems in 2008 and brings over 20 years of Security Industry experience to both brands.