CE Pro January 2023 - 29

Dip - There is a continued
decline, albeit slight, in
the number of commercial
installations being done by
integrators. According to the
data, dealers performed a
median of eight commercial
projects last year. That is
down from a median of 10
commercial projects in 2021.
That downward trend began
in 2020 when the pandemic
forced so many businesses
to close and dried up
many of the key commercial
vertical niche markets that
some dealers focus on, such
as hospitality/bars/restaurants
and corporate office
environments.
It means that in 2022,
only 14% of CE pros projects
came from commercial
sources. That figure is slightly
up (1%) from 2021, but still
way down from the peak of
nearly 30% of revenues from
commercial projects that
was achieved pre-pandemic.
As corporate offices continue
to struggle with the Work
From Home trend taking
hold, it will be interesting to
see if there is any sort of a
bounce-back in commercial
work among CE pros.
On a positive note, the
size of the commercial projects
that are being completed
by residential integrators
continues to be strong. The
median commercial market
installation was $38,844 in
2022, an increase of 29%
from last year's median of
$30,073.
Lack of Labor - The
lack of skilled employees
continues to hinder even
more rapid growth as dealers
were forced to achieve
their awesome gains in 2022
with small workforces. For
years, the median number
of employees has hovered
around seven or eight. In
2022, the median number of
employees reached 11, which
is an extremely positive sign
for the market.
There is some historical
context to the slow employee
growth. Many dealers
are still stinging from the
housing marketing collapse
in 2008 that forced them
to reduce their manpower
by 50% on average. In many
cases, dealers were slow to
downsize back then, so they
are subsequently slow to
hire in today's hot market.
Let's face it, few in the industry
could have predicted
the continued post-COVID
resilience (just ask all those
suppliers who were slow
to ramp up their factory
2022 Residential Revenue
by Type of Structure
49.7% 50.3%
New
Remodeling/
Retrofit
Construction
This percentage of revenue derived from existing homes
versus new construction is basically even.
2022 Sources of Revenue by Market
12% Service/Monitoring/Other ($260,051)
14% Commercial Projects ($310,752)
74% Residential Home Systems ($1,596,488)
The strength of the residential market showed in 2022 as the
percentage of income derived from the home market rose.
The percentage of revenue from commercial projects dipped.
Types of Projects in 2022
(Percentage of Integrators Working In)
75%
72%
Despite all the positive data,
there are still some blemishes to
this marvelous growth journey
- like commercial market dip,
lack of skilled labor and supply
chain problems.
30%
26%
Residential New Construction -
Single-family, Custom-built
Residential Remodeling/Retrofit
Residential New Construction -
Single-family, Production-built
44%
Residential Multi-Dwelling Unit
Commercial New Construction
52%
Commercial Remodeling/
Renovation
The percentage of integrators working in both single-family,
custom-built new homes and existing homes rose in 2022
by approximately 8% each, while most of the other market
segments remained relatively flat.
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January 2023 CE Pro | 29
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CE Pro January 2023

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