More clients will perform locksmithing services themselves, limiting industry growth
Los Angeles, CA (PRWEB) March 30, 2012
The Locksmiths industry depends on the health of the US housing market. When the residential market crashed in the late 2000s, demand for industry services did as well, with revenue falling 11.7% in 2009 alone. While a slight recovery occurred over 2010, revenue declined again in 2011 because residential construction and existing home sales continued to fall. According to IBISWorld analyst Brian Bueno, “in 2012, industry revenue is expected to decrease 0.4% to $1.58 billion, despite some recovery in the housing market.” Locksmiths will continue to reduce service prices to capture clients. They will also face pressure from the negative effects of potential clients installing and performing locksmithing services themselves. Overall, revenue is estimated to fall at an annualized rate of 3.1% over the five years to 2012.
The industry includes employers and nonemployer firms, with the total number of these enterprises totaling 15,103 in 2012. Bueno says, “while this number has increased at an average annual rate of 0.3% over the past five years, the number of employer firms specifically has actually fallen 2.4% to 3,367 over the five years to 2012.” This decline occurred as the weak demand environment forced many companies out of business, while small one-person firms have grown due to an increase in self-employed people during the past few years. As a result, the total number of industry employees is estimated to stand at about 25,975 in 2012, down from about 27,420 employees in 2007. In the face of weak demand, employer firms cut employees to reduce costs, and many firms simply exited the Locksmiths industry.
Demand for industry services is expected to strengthen over the next five years, aided by the long-anticipated recovery in the housing market and continued US economic growth. Nevertheless, industry revenue growth will be hampered by ongoing external competition, as large security firms supply industry-related services and more consumers perform simple household services themselves. Therefore, while the residential construction and general housing market is projected to grow strongly over 2013, revenue will continue to decline. After many consecutive years of revenue declines, growth is projected for 2014 onward, as accelerated demand trumps the negative effects of external competition.
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This industry performs installation, repair, rebuilding and adjusting services for security systems, as well as lock management of keying and key control systems. Firms also sell mechanical or electronic locking devices, safes and security vaults.
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