D-Tools has released its 2024 Year-in-Review Market Health Report, offering an in-depth analysis of industry performance, key trends, and strategic insights based on real project data from more than 3,000 active integration companies.
Despite economic challenges, the custom integration industry grew by 6.5% in 2024, demonstrating resilience amid inflationary pressures and election-year uncertainty. Compiled from 175,000+ proposals and 70,000+ signed contracts in D-Tools Cloud, the report highlights essential industry shifts and actionable insights for business leaders looking ahead to 2025.
Key Findings from the 2024 Market Health Report:
- Industry Growth – The market saw a 6.5% increase in total installation sales, with the average project contract reaching $17,535, up 4.6% from 2023. Growth was strongest in the first half of the year, but contract values declined 4.8% in Q3 and Q4, largely due to election-related uncertainty.
- Profitability Insights – Projects valued over $10,000 delivered profit margins of 45%–47%, while smaller projects (<$10K) had lower margins of 30%–39%, reinforcing the financial benefits of targeting larger installations.
- Proposal Trends – Integrators created 10% more proposals in 2024, with an average proposal value of $37,057 (+5.3%). However, the close rate declined from 59% to 53%, signaling increased competition and cautious consumer spending.
- Labor vs. Product Sales – Labor revenue grew slightly, making up 24.1% of contract value compared to 22.2% in 2022. While still lower than other trades (e.g., electrical, HVAC), the trend suggests integrators are more effectively protecting labor rates.
- Top Equipment Categories – Display devices remained the top-selling category, while surveillance cameras climbed from #4 in 2023 to #2 in 2024, reflecting growing demand for security solutions.
Strategies for 2025 Growth:
To maintain profitability and drive growth, the report suggests integrators should:
- Prioritize larger projects to maximize profitability.
- Enhance proposal strategies to improve close rates and reduce discounting.
- Expand into high-growth categories, such as security solutions.
- Leverage automation tools to streamline proposal and project workflows.
- Benchmark performance against industry growth trends to remain competitive.
- By implementing these strategies, integration businesses can strengthen their market position and capitalize on emerging trends in 2025.