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The ...
Profit margin creeps up as sales per employee dips
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By Carol Shea, Wade Swormstedt
Editor's Note: Each year Signs of the Times magazine publishes a State of the Industry report for the commercial sign industry. In March of this year, Signs of the Times sent a letter and survey to a sample of their subscribers identified as being part of the CAS/commercial business. The letter requested their help with this year's industry survey, which included new questions concerning planned equipment investment in the year 2000. Then, ST's research supplier, Smyth Marketing Resources, randomly selected 506 of the magazine's subscribers to participate by telephone, thus providing a sampling error of plus or minus 4.4%, with 95% confidence. The fourth annual report shows that the CAS/commercial sign industry grew by an estimated 7% in 1999 to reach the $4.3 billion level. The report also reveals that the critical statistics of profit margin and sales per employee went in opposite directions. What follows are some of the highlights from that survey. This year's complete report can be found in the August 2000 issue of Signs of the Times, which can be purchased online. Preview:
| Table 1: Distribution of CAS/Commercial Respondents by Sales-Volume Classification | |||||
| Sales Volume | # of Shops | % of Total Shops | Total Sales | % of Sales | Ave. Sales/Resp. |
| $500,000 + | 79 | 15.6% | $68,674,000 | 50.9% | $869,300 |
| $250,000 to $499,999 | 98 | 19.4% | $32,180,000 | 23.8% | $328,400 |
| $100,000 to $249,999 | 186 | 36.8% | $26,986,000 | 20% | $145,100 |
| $50,000 to $99,999 | 80 | 15.8% | $5,362,000 | 4% | $67,000 |
| Less than $50,000 | 63 | 12.5% | $1,727,000 | 1.3% | $27,400 |
| Totals | 506 | 100% | $134,929,000 | 100% | $266,700 |
| Table 5a: Three-Year Comparison of Annual Change in Sales Volume | ||||
| 1996 to 1997 | 1997 to 1998 | 1998 to 1999 | 1997 to 1999 | |
| -10% + | 6.7% | 6.7% | 4.4% | -2.3% |
| -9% to -1% | 3.5% | 1.5% | 3.4% | -0.1% |
| 0% (No Change) | 12.7% | 12.6% | 17.4% | +4.7% |
| +1% to +19% | 30.9% | 32.7% | 37.5% | +6.6% |
| +20% to+49% | 28.3% | 24.2% | 25.9% | -2.4% |
| +50% + | 11.7% | 16.0% | 6.3% | +5.7% |
| Don't Know | 6.2% | 6.3% | 5.1% | -1.1% |
| Mean Ave. Change | 18.3% | 27.2% | 16.8% | -1.5% |
| Median Ave. Change | 13% | 13% | 10% | -3% |
A 27.2% 1997 to 1998 increase appears to be an aberration, however, because the increases from 1995-1996 and 1996-1997 were both approximately 18%. Overall, sales continue to increase, but at a slightly slower pace.
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