It mirrors the sobering results from last month’s Electric SOI with an estimated decrease of 18%.
Last year, we thought the CAS/Commercial SOI report was bad. In the July 2010 ST issue, the Electric SOI report was much worse. It doesn’t get any better in this current CAS/Commercial SOI report for fiscal 2009. Whereas last year, we estimated a 3% drop (the first time in a decade) for the entire commercial sign industry (from $6 billion to $5.8 billion), it’s six times worse for 2009 with an estimated 18% drop to $4.75 billion, which contracts the market to the 2001 level.
Fiscal 2009 represents the first time our average, non-electric, sign-company respondent has ever reported an overall decline in sales from one year to the next (Table 5). The average drop of 9.5%, while better than last month’s average, electric-sign company 12.3% sales drop pales in comparison to last year’s average gain of 1%, which had been the worst result ever, having trumped the previous low of only a 7.8% gain from 2000 to 2001. (Remember, “this year” means 2009, and “last year” means 2008.)
Also, since its inception 14 years ago, this study has always reported an average profit margin in double figures. Yet, for 2009, it plummeted to 7.6%, whereas it consistently hovered near 13.5% from 2005 to 2007 (Table 15).
Similarly, average sales per respondent had grown each of the past 12 years. But this year’s average sales volume of $437,355 represents a 26% drop from last year’s record high of $649,022 and the lowest figure since fiscal 2000 (Table 1).
The best silver lining, as with last month’s Electric SOI, is average sales per employee. The $111,300 is the second-best figure ever and only the second time it has reached six figures (Table 13). This is partially explained by the average number of employees reported for 2009, 3.9 (Table 12), which is the lowest figure since the 3.8 reported for 1998. So, as with the electric-sign companies, commercial-sign companies have apparently downsized significantly to counter declining sales.
To obtain every response, Smyth Marketing Resources individually calls sign companies, all of whom have already received questionnaires in order to be prepared for the call. Consequently, Smyth keeps making calls until it gets the desired number of responses. So this year’s 405 responses align with the approximately 400 responses used each year.
In contrast, data for the Electric SOI is obtained via a mailed survey. Consequently, its number of responses fluctuates.
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