Identity Industry Shrugs Off the Politics in Cautiously Optimistic SIA Survey

A new report from the Security Industry Association paints a portrait of an industry that, despite its challenges, continues to show resilience and growth as it heads into the final quarter of the year.

The September-October 2024 SIA Security Market Index presents a mixed but generally positive outlook, despite challenges stemming from political gridlock and economic uncertainties. According to the survey data, 71 percent of respondents from various sectors of the security industry reported favorable business conditions, though this is a slight decrease from earlier in the year. Of those, 28 percent rated current conditions as excellent, while 43 percent described them as good.

This represents a three-point decline compared to the previous survey from July-August 2024, reflecting ongoing concerns about government instability and budgeting delays.

The access control/identity management and integration sectors featured prominently in the report, comprising 23 percent and 20 percent of respondents, respectively. Respondents in these sectors faced specific challenges related to delayed U.S. government budget approvals, which have put numerous initiatives on hold. A key concern for many businesses, particularly in biometrics and identity management, is the impact of continuing resolutions and budgetary uncertainty on research and development (R&D), sales, and production. Despite these hurdles, many companies remain optimistic about future growth.

The SIA Security Market Index saw its largest jump in over a year, increasing by seven points to a score of 55, slightly above the 12-month average of 53. This rise is most noticeable among integrators, whose index jumped by 13 points to 70, signaling robust confidence in future business conditions.

Over the next three months, 77 percent of respondents anticipate an increase in product and service sales, with nearly 65 percent expecting to hire more employees or extend working hours. These numbers mark a strong rebound from two months prior when employment projections had dipped to 52 percent.

Although political uncertainty, especially related to the 2024 U.S. presidential election, remains a concern for some, the report suggests that the impact on the security industry may be limited. A significant number of respondents expressed little preference regarding the outcome of the election, with 49 percent saying it wouldn’t make a big difference either way. However, 32 percent of respondents favored a Donald Trump victory, while 18 percent preferred Kamala Harris, indicating a divide in political expectations depending on the sector.

For the biometrics, identity security, and authentication sectors, specifically, the report emphasizes the cautious optimism felt by businesses. Federal spending on security projects has been sluggish due to political tensions, but companies anticipate that conditions will improve significantly in the fourth quarter of 2024.

Notably, respondents also expressed concerns that ongoing international conflicts, such as the wars in Israel and Ukraine, are siphoning funds away from security projects that involve biometrics and identity management solutions.

Nevertheless, the overall outlook is positive, with expectations for increased sales, employment, and investments in key areas like R&D and marketing.

Source: SIA

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September 25, 2024 – by the ID Tech Editorial Team