CE Pro January 2023 - 34

RESEARCH
State of the Industry
work, there is a continuing
trend focusing on remodeling
versus new construction.
That trend began back in
2008 with the collapse of
the housing market. Prior to
the housing bubble burst,
dealers earned nearly twothirds
of their revenue from
new construction. Today,
it is a near even split. In
2022, dealers report earning
50.3% of revenue from new
construction and 49.7% from
existing structures (both
commercial and residential).
Three out of four dealers
work in single-family, custom-built
homes.
Nearly the same percentage
(72%) work in existing
homes. Meanwhile, three in
every 10 integrators work
in single-family, production-built
homes, while
more than one-in-four (26%)
work in multi-dwelling units
(MDUs). In commercial environs,
more than half of CE
pros worked in an existing
commercial establishment
last year, while 44% worked
in newly constructed commercial
spaces.
In terms of commercial
vertical markets, corporate/
offi ce is the most common
area of projects, followed by
bars/restaurants, hospitality/hotels,
houses of worship,
education (both K-12
and higher-ed), retail and
large commercial/industrial
locations such as arenas or
concert venues. About 14%
of dealers do government
projects.
Hot Equipment
Categories
The LED revolution is the
likely impetus why dealers
report lighting fi xtures as
the product category in
which they anticipate the
highest growth rate next
year. Dealers expect their
lighting fi xture business to
leap by 21% in 2023. Highend
control systems are
right behind lighting fi xtures
in terms of anticipated
growth. Other hot categories
with strong growth
rates anticipated include
landscape lighting, home
networks, 4K UltraHD TVs,
and surveillance cameras.
With revenues up 33% last
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year, it's not surprising to
see that overall expenditures
on equipment were up 26%.
Certainly, infl ation contributed
to that lofty increase
also as prices went up on
just about every product
imaginable. Every broad category
of gear was purchased
more frequently. In total, integrators
bought on average
$634,954 in equipment in
these fi ve main categories.
Speaking of purchasing,
the supply chain crunch
changed the way dealers
buy products. In 2022,
dealers report buying 36%
of their products directly
from manufacturers. That is
down 3%. Likewise, 30% of
products were purchased via
distribution. That is down
4%. Where did they turn to
get their equipment? Retail.
The percentage of gear
bought at a physical retail
location rose 6% to 19% of
all products.
The same trend happened
online, with 15% of equipment
in 2023 acquired via
34 | CE Pro January 2023
Overall
expenditures
on equipment
were up 26%.
Certainly, infl ation
contributed to
that lofty increase
as prices went up
on almost every
product.
online etail. The bottom
line is that dealers went
wherever they could to buy
products.
Finally, integrators once
again have the most infl uence
in terms of choosing
which products go in the
home. Of course, the buying
decision-making isn't necessarily
black and white. For
example, an integrator might
showcase a good/better/
best solution for their client,
allowing the customer to
select from those three
choices. In that case, who
is the " decision-maker, " the
integrator who narrowed it
down to just three options
or the homeowner?
Either way, CE pros report
they have the fi nal decision-making
authority on
product selection 36% of
the time, with homeowners
24% of the time. CE Pro
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CE Pro January 2023

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