LED lighting has become a major force in signage markets for channel letters, cabinet signs, message reader boards, and large-format video-screen displays. The growing demand for more advanced, brighter, and eco-friendly sign-lighting solutions has pushed manufacturers to develop a broad range of high-quality LED-based sign lighting products that deliver effective solutions at increasingly competitive prices.
With this market report Sign & Digital Graphics aims to provide a snapshot of the marketplace from the sign shop's perspective. Our goal is to help gain a clearer picture of the segment including the types of jobs being done, the equipment being used and the relative health of illuminated signage today.
The survey was conducted in March and April 2016 and included verified businesses and subscribers of Sign & Digital Graphics magazine. These businesses are primarily involved in signage and digital graphics including wide-format printing, commercial, dimensional, electric, P.O.P., exhibit displays, vehicle wraps and outdoor advertising.
We surveyed a wide range of shops from all 50 states, with some located outside the continental U.S. Most respondents (64%) indicate that some portion of their business is directly related to LED/EMC illuminated signage. Most shops (58%) indicate no change in their staffing size compared to last year.
Of the shops participating in the survey 33% indicate that they employ full-time licensed electric sign installers. Of the shops with full-time installers
, 48% report paying them wages up to $25 per hour, while 8% of those shops report installer wages above $35 per hour.
A majority (55%) of the shops surveyed say they offer some type of warranty for their electric signage work. Of those shops offering warranties, the majority (69%) say that the warranty does not increase the price of the installed job. Most shops (53%) offer a combination of both a shop warranty and the LED/EMC component manufacturer warranty.
Regarding the educational resources used by shops, 25% of respondents indicate that industry magazines are a top resource used by installers for continued training and education.
It seems that shops are quite active on social media as well. The majority (72%) of shops actively manage Facebook as their social media channel. Other social media outlets being used by shops include LinkedIn (49%), Google+ (34%) and Twitter (24%). One fourth (25%) of survey respondents indicate that they don’t actively manage social media for their business.
For sign illumination jobs, 17% of the shops surveyed say they use LEDs exclusively while 43% say they mainly use LEDs. Most (61%) shops say they use fluorescent at least some of the time, and 38% say the same regarding their use of neon.
When it comes to how shops illuminate sign cabinets, the majority (53%) of respondents say they use LEDs most or all of the time. And 59% of respondents say they sometimes use fluorescent lighting for sign cabinet jobs.
For channel letter work 40% of shops report that all of their channel letter jobs are completed using LEDs, while 59% of respondents say that some or most of their channel letter jobs are for LED retrofits.
Regarding LED module components, survey results show that white LEDs are used most frequently (69%), and 15% report that white is always used. Comparing red, blue, green and orange colored LED modules, the most popular is red with 29% of respondents indicating frequent use red LEDs.
Revenues and Outlook
Reported revenue is up for the most part, and the outlook for the future is good. The majority of respondents (57%) indicate that in the past year, revenues had increased for their electric sign business, 23% say that business has been flat, and only 7% report a loss in illuminated signage revenues.
Significantly, 62% of respondents indicate that for the remainder of 2016, revenues are expected to increase. Those expecting to see an increase in business for 2016 predict that illuminated cabinet signs (46%) and channel letters (46%) will show the largest increases, followed by EMC Displays (31%).
Survey respondents report that channel letters (30%), illuminated sign cabinets (29%) and EMC/LED billboards (22%) jobs delivered the highest estimated revenues (more than $50,000) over the last 12 months.
Fluorescent-to-LED retrofit (33%) jobs are reported as the top earner in the $1-$10,000 range for estimated revenues, followed by edge-lit signage (31%), ground lighting (28%) and channel letters (22%). Fully half of respondents report not seeing any revenue from neon in the previous 12 months of installed electric sign jobs.
Overall, respondents report that channel letters (37%) yielded the most revenue, followed by illuminated cabinet signs (21%). Looking at EMC displays (message displays, gas prices, ticker displays, time/temp), 13% of shops say that the segment yielded the most revenue.
When looking at the types of jobs that shops install and produce, the bulk of the work is going to cabinet signs, channel letters and fluorescent-to-LED retrofits. The majority of respondents say they install channel letters (72%), illuminated cabinets (72%), and fluorescent-to-LED retrofits (53%).
Signs shops say the most common jobs they produce are for cabinet signs (62%), channel letters (49%), and edge-lit signs (42%). Survey respondents indicate that the highest volume of jobs are in channel letters (more than 25%) and illuminated cabinet signs (more than 25%).
The majority of respondents (80%) indicate that backlit sign cabinets and channel letters and/or raceways (76%) are the top products and services they offer. Electronic message center component modules and signs, and LED retrofits both came in at 53%.
A majority (58%) of respondents say that they do not own automated letter-bending equipment, and more than half of respondents indicate that they purchase channel letters, backlit sign cabinets and EMC components from wholesale providers.
The majority of respondents (60%) report average quote-to-finish times of 30 days or less, while about 19% say that the average quote-to-finish times are more than 40 days.
Challenges and Buying Factors
We also asked shops about the challenges they face and the criteria they use to select the products that they buy. Respondents report that pricing is the greatest challenge in LED lighting/EMC sign illumination; however they also cite product reliability and the learning curve when entering the market as other significant challenges.
The majority of survey respondents (60%) report that reliability is the most important factor when purchasing LEDs and EMC’s. Other important buying factors include durability (55%), price (43%) and brightness (40%). Additionally, 66% of survey respondents say that customer support from the LED/EMC supplier is also very important.