10/07/2021
Associate Advisor Update (October 2021)
SHDA Associate Advisors Update
Jamie Lyn J. Callahan
Chair, Associate Advisors Committee
Channel Sales Manager, Allegion
OCTOBER 2021
Consolidation in the industry – between manufacturers and distributors alike. Within the distribution space especially we see a blurring of lines as CHDs (and some wholesalers) pick up integrators, locksmiths, and glasshouses; expanding the scope of their capabilities and increasing their potential value and revenue on a project.
Ecommerce continues to grow. Polls show purchasing agents in institutions and commercial buildings either price check or procure over 50% of all purchases online. Distributors and manufacturers need to stay relevant, either offering their partners a way to purchase online or having a strategy to compete with or against businesses that do.
From an economic standpoint:
- Residential markets in the US continue to see positive drivers of demand in new housing and retail/ecommerce. NC expected at 34% growth this year, outlook 5.6% next year, and 6.5% in 2023. Headwinds include material inflation, labor capacity, and rising interest rates.
- Increased R&R in homes provide an opportunity for walk-in and service business with small retail, locksmith, lumberyard, and home automation partners, to name a few
- Commercial and institutional markets in the US have begun to come back, with YTD21 new construction starts moving into positive territory this past May. Association of Building contractors currently show construction backlog of 8 ½ months, significantly up.
- Next year commercial outlook expected flat to just down with 2023 at 3% for (institutional) and 8.5 % (commercial) growth
- Data center, pharma, labs, smaller tenant fit out all expanding and expect positive growth over next year
- In the aftermarket space:
- Retrofit opportunities remain as hospitals, education and other facilities consider upgrading EAC to increase security and control flow of people within their premises.
- Aftermarket break fix expected to recover as facility managers gradually pull the trigger on deferred maintenance projects. Expected outlook for ’21 is growth of 1.2%, ’22 is 4.1% and ‘23 is 1.4%
- BILLIONS of dollars of new funding available to end-users through federal funding programs. ESSER, HEERF, CRES, and more. We’re seeing many end users take advantage of these monies as they navigate the system. I would suggest reaching out to your advisor partners to see how they might help support you in helping your customers fix and upgrade spaces or do some research on what dollars are available to those in your area.