Primary growth segments this year are expected to include corporate offices, retail, and lodging – all with forecasted growth rates of 5% or more.
Most other segments are likely to grow (roughly with the rate of inflation) and therefore be considered stable.
The houses of worship market is the only segment expected to decline in 2018.
Excerpted from the report, we’ve identified trends in each market that are impacting construction (either positively or negatively):
- Reduced corporate tax rates are expected to instill opportunities for increased capital investments
- Slowdown in high-tech office space development is the primary drawback of forecasted growth
- Data centers/mission-critical facilities are becoming a larger component of corporate facility spending
- Tax overhaul is expected to positively impact public and private education markets
- Increasing K-12 enrollments in more than half of U.S. states
- Greater use of flexible space to accommodate year-round schools
- Public/government construction will benefit from the uninterrupted flow of private activity bond financing
- Local governments are facing significant fiscal constraints
- Uncertainty around federal healthcare policy continues to delay capital investments
- Providers may anticipate an increased number of uninsured patients due to tax reform
- Movement away from large-scale new hospital construction with emphasis on expansions and renovations
HOUSES OF WORSHIP
- Ongoing improved (and, in many cases, creative) space utilization
- Demographic shifts and trends shaping demand for facilities across various markets
- Spending remains strong after double-digit, year-over-year growth rates since 2012
- Oncoming supply is outpacing demand, causing increasing vacancy rates
- Tax overhaul will have mixed results but, overall, will make the United States a more attractive base for operations due to international provisions
- Manufacturing capacity utilization rates remain below historical averages
- Many new construction and facility upgrade projects are in planning stages
- The traditional retail sector is expected to be one of the largest beneficiaries of the new tax legislation
- Rise in e-commerce continues to reshape and drive demand for warehouse and distribution center construction
Download the report to find out what these trends indicate for short- and long-term construction.
Not surprisingly, the report also reveals that our industry still struggles to attract, onboard, and retain employees at nearly every level. At the critical stage: qualified technical workers and sales professionals. The low unemployment rate makes it tough especially when adjacent industries are reaching into our member companies to recruit top talent.
NSCA members that provide traditional AV systems, physical security, alarms, and life safety solutions at low margins are especially vulnerable as we see dramatic compensation differences with building automation and control, MSPs, IT VARs, solutions providers, and bundled services providers. Higher billed rates have allowed adjacent industry competitors to drive up labor costs in businesses that have not prepared for these increases.
NSCA is stepping up efforts to assist you with transitioning to managed and value-added services as a way to combat low-margin business and compete for top technical talent. The annual Pivot to Profit conference is just one way you can prepare your organization for the move to managed services.
To help with hiring, NSCA’s IGNITE program launched the IGNITE Career Center. In addition to arming integration firms and consultants with marketing and promotional materials to use at job fairs and share with students who are considering a move to the industry, IGNITE now offers another benefit: an online job board and career center, where Gold and Platinum NSCA members can post unlimited numbers of job openings.
You can also find information about NSCA’s Technical Assessment Tool (to help gauge technician proficiency before you hire them) and C-SIP training program (which offers online training for new employees in sales, marketing, project management, and operations roles, resulting in a certificate as a systems integration professional).
Download the Electronic Systems Outlook Winter 2017 report now: Free for Gold and Platinum NSCA members, and available to Bronze and Silver members for $199.
And don’t forget to sign up for the free one-hour webinar on March 20, 2018, to learn more about the Electronic Systems Outlook Winter 2017 data and how it can be used to focus sales efforts and improve business.