...Is Security Recession Proof?

...Last week we talked about the economy and what the experts expect - and what that means for you. Today we are going to talk about security; is it recession proof, and what it means when security does poorly versus other industries.

The answer to the first question is a resounding no - we are not recession proof. Despite years of prosperity during economic slowdowns, and even the growth in the post 9/11 world, this recession hit everyone - us included. Some felt the sting right away; manufacturers first as they saw business slow down and were left overstocked and under forecast as early as Q4 '08 and Q1 '09. Many of the projects for installers and integrators were already under way, and that group wondered if they would feel the effects of the downturn as far back as Q4 '08. But that wonder was simply a pronounced lag into the recession, and they 'jumped in the pool' with the rest of us early this year. The residential installation and monitoring business has reflected the housing market - and more importantly the unemployment statistics - of the nation. Despite the importance of home security, the fact remains that without a job, and without money - you do without a home system.

We mentioned earlier our strategy session with Frost & Sullivan last week. Their forecasts actually showed growth for the security industry in 2009, albeit much lower than the double digit growth we've realized as an industry over the past decade. This growth was anticipated to be driven by spending in the education, healthcare and government security areas, and to be realized primarily by the small-to-midsized manufacturers of video and access products, as well as data storage and PSIM providers. The belief being that money is being spent, and the smaller companies with less overhead will be able to weather the slowdown better than the industry bellwethers.

As a company that produces over 470 events globally, we serve many different markets. Looking at our business in 2009, and 2010, we look at security as one of the most resilient, if not THE most resilient, of the markets served with anticipated growth slowing down to 3-5%. In markets like home building, recreation markets like golf, and luxury markets like jewelry we are seeing steep declines from 20-40%.

So we are doing OK. While it may not seem like it right now; we are. And we'll get through this.

But as the nature of our business is one-to-one conversations, tell me - what do you think?

Ed Nichols
View Profile