2019 State of the Industry Report

Compiled by Jason Cramp

Project: Coty Fume Scent Lounge, Hudson's Bay, Yorkdale Shopping Centre, Toronto, Ont./Design: DKStudio Architects Inc./Photo by Ben Rahn, A-Frame Studio/Fabrication: Eventscape Inc./Technology: Icon Media

Project: Coty Fume Scent Lounge, Hudson’s Bay, Yorkdale Shopping Centre, Toronto, Ont./Design: DKStudio Architects Inc./Photo by Ben Rahn, A-Frame Studio/Fabrication: Eventscape Inc./Technology: Icon Media

Even with the recent uncertainty of trade relations with the U.S., it has not impacted the Canadian economy as one may have expected. In fact, according to a RBC Economic Outlook Report released in September, consumer spending and business investment remains optimistic for the remainder of 2018.

The International Sign Association’s (ISA’s) current outlook shows the sign, graphics, and visual communications industry is enjoying a strong 2018 and is forecasting in its third-quarter report that these trends will continue to excel into 2019 thanks to the growing economy. The ISA’s quarterly economic reports, which assess a range of commodities, supplier markets, and end-user markets are compiled by market research firms IHS and Vandiver and Associates and sponsored by the National Association of Sign Supply Distributors (NASSD).

Based on data compiled earlier in the year, for suppliers to the printing industry, for example, the positive outlook from 2017 continued, with forecasts suggesting the next few years will take on the character of a late-cycle surge. Both upstream and downstream markets in electrical and digital signage, however, are expected to outperform static signage.

Digital signage

The worldwide value of indoor digital signage systems based on light-emitting diodes (LEDs) reached US$21 billion in 2017 and will reach US$43.2 billion in 2027, according to ElectroniCast Consultants, a market research firm.

The forecast, which suggests market value will more than double in 10 years, includes both cluster-type LED screens and LED-backlit liquid crystal displays (LCDs).

Meanwhile, ElectroniCast reports the global market for LED-based subsystems in outdoor on-premise signage applications, including screens, sign boxes, and channel letters, will increase in value from US$3.7 billion in 2017 to US$7 billion in 2027.

Indeed, the ISA’s outlook on the first quarter of 2018 remained strong for all segments except end markets for architectural signage, which may instead remain on par with historical averages before improving next year.

Project: Coty Fume Scent Lounge, Hudson's Bay, Yorkdale Shopping Centre, Toronto, Ont./Design: DKStudio Architects Inc./Photo by Ben Rahn, A-Frame Studio/Fabrication: Eventscape Inc./Technology: Icon Media

Project: Coty Fume Scent Lounge, Hudson’s Bay, Yorkdale Shopping Centre, Toronto, Ont./Design: DKStudio Architects Inc./Photo by Ben Rahn, A-Frame Studio/Fabrication: Eventscape Inc./Technology: Icon Media

ISA’s positive outlook in the first quarter extended into July with anticipated economic growth of approximately three per cent for the later part of 2018, while the forecast for 2019 and 2020 are expected to see 2.8 per cent and 1.8 per cent, respectively. At the time, analysts feared the trade stance of the U.S. could trigger a trade war, while other issues such as increasing oil prices and rising political risks in Europe could affect the industry’s future growth prospects.

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At the same time, industry manufacturing remained propitious, while IHS Markit Ltd., a UK-based global information provider, reported the industry would see a shift in connected and integrated environments for digital signage displays using technologies such as near-field communication (NFC), motion sensor touch capabilities, along with voice-and-face recognition technology. According to analysts, this progression will drive the development for interactive whiteboards (IWBs) in new applications such as retail and wayfinding.

The firm’s “Digital Signage Industry Market Tracker – Q2 2018” states as more companies use ‘place-based media’ to relay information at the right time, in the right place, to the right audience, the worldwide digital signage space is becoming increasingly prevalent.

Further, Andy McRae, general manager for Dot2Dot Communications, and Mark Mantha, a market development consultant, say the use of audio video (AV) and digital signage has become synonymous as companies look to maximize the use and value of their screens and devices to simultaneously communicate to employees, customers, and visitors. The efficiencies gained by relying on a single company to provide the entire visual communications network are undeniable.

That said, both industry experts say advancements in display technology will continue to drive video walls to grow incrementally in the AV space and, in turn, will lead to incredible digital signage deployments across many verticals, as already witnessed in airports, retail, school campuses, etc.

Finally, while end markets for architectural signage appeared to be weak going into the first quarter, new data in the ISA’s third quarter report revealed the architectural/wayfinding markets had a stronger-than-expected 2018, which analysts predict will continue to increase in 2019. The same can be said for electrical/digital end markets next year, which can be partly attributed to an increase in spending on intellectual property products.

Wide-format printing

The global value of the large-format printer market is forecast to experience a compound annual growth rate (CAGR) of four per cent, according to research firm MarketsandMarkets, rising from nearly US$8.4 billion in 2017 to nearly US$10.6 billion in 2023.

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The company attributes this growth to increasing demand for large-format printing in the textile, advertising, and packaging industries. The outdoor advertising sector, for example, has seen growth in the adoption of printers with ultraviolet-curable (UV-curable) inks, as they dry quickly and are compatible with a wide range of substrates.

MarketsandMarkets’ global forecast for this sector takes into account all large-format printers, raster image processor (RIP) software, inks—including solvent-based, aqueous, UV-curable, durable aqueous ‘latex,’ and dye sublimation formulations—and related services.

Printers between 1.1 and 1.5 m (44 and 60 in.) wide are expected to represent the largest share of the market between 2017 and 2023. They are well-suited for producing point-of-purchase (POP), event, and floor graphics, among other indoor and outdoor signage. Secondary applications include fine art and photo printing.

On a global scale, the Americas hold the largest share of the market. This region’s signage industries continue to grow as more companies invest in both outdoor and indoor advertising.

Out-of-home (OOH) advertising

Digital out-of-home advertising can comprise a variety of screen shapes, sizes, and levels of interactivity, making it one of the fastest growing and interactive forms of advertising.

In fact, McRae says marketers and advertising are increasingly turning to out-of-home (OOH) media and to better handle this demand by offering better campaigns, the OOH industry is in the midst of a dramatic shift to digital technology. It enables advertisers to create campaigns that are highly targeted, interactive, and offer intelligent content based on an ever-growing mountain of actionable data.

The global DOOH market is expected to get bigger at a compound annual growth rate of 12.6 per cent from 2017 to 2023, according to a report by Allied Market Research. It also predicts the market will reach more than $8 billion within the next five years. The billboard segment held the highest market share in 2016 and will continue to grow by 12.8 per cent from 2017 to 2023.

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With files from the Royal Bank of Canada (RBC), International Sign Association (ISA), ElectroniCast Consultants, IHS Markit Ltd., Dot2Dot Communications, and MarketsandMarkets. For more, visit www.rbc.com, www.signs.org, www.electronicastconsultants.com, www.ihsmarkit.com, www.dot2dotcommunications.com, and www.marketsandmarkets.com.

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