CE Pro January 2023 - 30

RESEARCH
State of the Industry
2022 Influence on Brand Selection
(Percentage of Projects with " Final Say " )
Builder
2022 Influence on Brand Selection
6%
Consultant/
Specifier
Architect
Interior
Designer
16%
Homeowner
24%
Integrators have the biggest influence on the final
product selection, but the decision-making process can
be a " gray area " in which often dealers narrow down the
options to compatible products before letting others
make the final selection.
2022 Expenditures by Product Category
$86,342 (up 9%)
Security
$129,773 (up 27%) Networking/Communications
$142,130 (up 21%)
$145,227 (up 18%)
$131,481 (up 26%)
Home Theater/Video
Audio
Home Automation/Controls
Overall, dealers spent 26% money more on equipment in
2022 due to inflation and a higher number of projects. This
data represents the end-user cost of products that dealers
purchased.
2022 Profit Margins
35%
35%
34%
30%
29%
Installation Labor
Programming Labor
Service Labor
Equipment
Design Labor
Profit margin on equipment slightly increased in 2022 as
demand was high. Meanwhile, profit margins in every labor
category rose between 2% and 7% as dealers raised their
labor rates.
30 | CE Pro January 2023
7%
10%
Integrator
37%
2022 Purchasing Sources
Top 10 Anticipated Growth Rates
by Technology for 2023
1. Lighting Fixtures 21%
2. High-end Control Systems 20%
3. Landscape Lighting 18%
4. Home Networks 18%
5. Surveillance Cameras 17%
6. Remote Managed Services 15%
7. 4K/8K TVs/Displays/Projectors 15%
8. Home Theater/Immersive Audio 15%
9. Wellness (Circadian Rhythm Lighting, IAQ, Water Quality) 14%
10. Soundbars 14%
These are some of technology categories where integrators
expect strong growth in 2023, led by lighting fixtures.
Landscape lighting was not even in the top 10 list last year.
Video surveillance continues to be a strong category.
production as the pandemic
waned and the market
demand spiked).
More than ever before,
it appears the industry is
working aggressively to
rectify the labor shortage.
CEDIA's workforce development
group is working with
more trade schools, even
sponsoring graduates to attend
its regional Tech Summits.
Also, organizations like
PrepTech and HireSparks are
finding and grooming new
technicians for hire.
Supply Chain Problems
- While the supply
chain problems have eased
somewhat, the difficulty in
obtaining products is still a
problem. According to the
study, dealers report they
would have completed
six more projects in 2022
had they been able to gain
access to the equipment.
That is the same number
of unfinished projects that
CE pros reported in 2021
and it equates to about a
10% missed growth rate. In
other words, if integrators
had received the product
they needed to finish for
six additional projects, it
conceivably could have added
nearly $200,000 more
revenue for each installation
company. (That's if they did
not collect any portion of
revenue from those unfinished
jobs, which is unlikely.
It is more likely that integrators
did collect some portion
of payment in 2022 for
those unfinished projects,
so the total lost income is
difficult to calculate.)
Digging Deeper
into the Data
Despite its consistent
growth over the decades,
the custom electronics
industry still remains an
artisan business, with more
than one-in-four companies
(26%) having fewer than
four employees. More than
one-in-10 (11.5%) are sole
proprietorships. On the
flip side, there are some
larger integration companies
starting to appear, especially
given the spate of recent
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CE Pro January 2023

Table of Contents for the Digital Edition of CE Pro January 2023
