Maybe, just maybe, hope is on the horizon for the U.S. sign industry. Across all types of sign companies, the outlook six months out is brighter than it has been since June 2008 (see Chart 1). That’s good news for all parts of the sign industry—including the end purchasers of signs, sign manufacturers and printers, and their distributors and suppliers. A Georgia commercial sign shop confirmed what the updated index numbers show, “This month’s volume and activity level is beginning to feel like the ‘old days’.” Results from an October survey of more than 600 sign and digital graphics companies show a first indication of brightening skies. The Sign Analytics research collaboration between Sign & Digital Graphics magazine and The Visual Information Group LLC is in its second year of surveying sign industry business conditions and demographics. Earlier surveys were taken in June 2008 and January 2009. ABOUT THE SURVEY The “How’s Business?” survey asks three basic questions. First: Compare your sign business sales now with business six months ago. Second: Compare your sign business now with business one year ago. And finally: Looking ahead six months, project how you consider business conditions, compared with business now. Five answers are possible: much better, better, about the same, worse, and much worse. An average of “3” for instance is business “about the same” while an average of “2” is worsened conditions for the comparison period. Because the exact same questions, and answer options, also were used in the June 2008 and January 2009 surveys, the Sign Analytics research results can now be expressed as an index number. The answers in both surveys were tabulated as numerical averages. The averages from June 2008 are expressed as a base of 100. An index number below 100 would show a worsening of business confidence, while any number above 100 would show improving confidence. The October survey results average 10 index points higher than the six-month outlook reported in January. That is a significant improvement in business confidence, with the electric and commercial sign segments actually above the June 2008 base number of 100. ALL HANDS ON DECK However, sign companies comparing their current levels of business to conditions both 6 and 12 months earlier almost uniformly indicated worse conditions. One well established small sign shop in New England reported, “I have been in business for 34 years and have never experienced such a year. We have been hit very hard.” With admitted difficult conditions, all parts of a business are in play. One respondent, a Midwest electric sign company, attended to fiscal basics, “Business is down 30 percent for the year. We let three employees go between last December and February. We don’t plan on giving any raises this year.” A vehicle graphics and wraps company from California reported sales two years ago in the “$300-400,000 range” but experienced a drop of 40 to 50 per cent over the past two years. But the owner added, “All businesses with funds need to spend money in advertising, especially in these hard times we are facing. Some of our customers do understand it and have become successful.” A commercial sign company in California was part of the better confidence index numbers yet cautioned, “The biggest hurdle has been volume and getting clients to pull the trigger on jobs—larger ticket jobs seem to be on the rise.” For other shops, however, volume is not as much of a problem as collections. One Texas electric sign manufacturer said, “We have noticed a slower pay cycle even for previously good paying customers. The average is about 15 days slower than last year. The trickle-down effect is that sometimes we must do the same. The upside is that most vendors and subcontractors understand, and allow us a few extra days if necessary.” And for many other sign companies, pricing and competition remain in focus. A digital printer in Michigan noted, “The business environment (in Michigan) is still terrible. But I have lost a lot of competition. I think the biggest plus is that I have lost the lowest-priced competition. As sign makers, I think the industry’s biggest problem is that we don’t charge enough to cover the labor.” Another Rust Belt-based print shop, with more than 20 years in the business, said, “At least six former sign shop competitors have closed in the last 12 months. We find our customers are expecting lower prices. Internet competition on banners is intense.” EXPERIENCE COUNTS. SO DOES OPTIMISM. A new question was added for the October survey: How many years have you been in the sign business? Answers ranged from “start-up” to “more than 20 years” (see Chart 2). There is a direct correlation between business confidence and the length of time a shop owner has been in the sign business. Experience talking? As one of those “more than 20 years” individuals, I can conjecture that maybe we just get cranky with age! Yet one commercial sign company in Minnesota spoke with experience when its owner noted, “This is a great time to be positioning for the gradual economic recovery. Business cycles are a reality and help weed out those companies whose finances or management are too weak for long-term survival.” Shops are exploring new sales techniques can help the bottom line in troubling times. A Florida digital printer said, “Customers are getting more discriminating. One thing that has helped us is the availability of samples. When the customer touches and feels the product they are about to buy, the sale is easily closed. We are doing all we can to give confidence to our customers and it seems to be working this far.” Optimism exists in many locales, however. A Pennsylvania construction sign supplier, possibly influenced by federal stimulus spending, said, “I think because of our diversity and constant digging for new prospects and projects we’ve been able to maintain our work load. I do see a slight downturn as we approach winter, however. We are not a company to stand still, so we will push harder and hope to increase our work flow.” The next Sign Analytics survey is scheduled for mid-January 2010. Based on those survey replies and related demographic data, and a proprietary model developed by The Visual Information Group LLC, sizing data will be available in the first quarter of 2010 on U.S. sign industry sizing and composition.