The Neon Sign Industry 2001 Survey

Last year, ST inaugurated the first-ever publicly available assessment of the scope of the neon sign industry. In that initial assessment, 142 of electric sign companies told us that neon constituted 29% of their total business, but that they used fluorescent bulbs more than neon to light their signs.

For this follow-up survey, we asked virtually the same questions, to provide the most accurate comparisons. The biggest difference is that last year’s responses included one from a $109 million company, whose response raised all size-oriented averages. The next largest company last year was $18 million. This year, the largest company to respond generated sales of $20 million in 2000. Additionally, this year, we received 108 responses.

Here are the highlights of this year’s results: Neon catapulted past fluorescent as the illumination method of choice for signage. Respondents said 57% of their electric sign sales in 2000 comprised neon, and only 34% comprised fluorescent lighting. This contrasts sharply with last year’s results, when neon was used only 41% of the time and fluorescent was used 47%. Neon as a percentage of overall sales increased slightly from 29% to 31%. Channel letters continue to represent the majority of all neon signs, but their percentage dropped from 64% to 58%. The highest percentage of respondents received neon training at a sign company different than the one for which they’re currently employed, which indicates tubebenders are on the move. The average electric sign company sells $631,710 in neon. Slightly more than one-third of all neon is outsourced. The average electric shop spent $47,340 on neon equipment and materials in 2000.

Because this survey is in its infancy, I would advise against tacitly viewing these results as trends. Once we’ve garnered three years of comparisons, some legitimate trends may begin to surface.

This survey is most useful for individual sign companies to see how they compare to their peers; any of the percentages should be representative.

These survey results are probably less instructive at the bottom line, where overall quantity averages have been computed. Keep in mind that all of the 2000 data presented is only based on a maximum of 108 responses. Additionally, none of the largest sign companies responded.

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To view a full report, purchase the March 2002 issue of Signs of the Times magazine, here.

Preview:

Table 3: Neon Expenditures (Equipment and Supplies)
Sales Volume	Response	Neon Expenditures $	Average/Response $	Neon Sales/Avg. $	Supplies as % of Sales
Less than 100K	19	269,100	15,584	45,766	34.1
100K-249K	15	174,700	11,647	62,079	18.8
250K-499K	11	238,500	21,682	178,655	12.1
500K-999K	10	152,000	15,200	165,495	9.2
1M-2.49M	16	1,875,400	117,213	547,550	21.4
2.5M-4.99M	5	277,500	55,500	955,256	5.8
More than 5M	5	893,000	178,600	3,320,850	5.4
n/a	5	22,000	11,000	11,000	1.4
Total	83	3,951,200	35,340	631,710	7.5
Total (1999)	108	7,123,750	65,961	707,314	9.3

Table 3 shows this year’s respondents spent less on neon materials and equipment (7.5% of sales) than last year (9.3% of sales). Of course, an established sign company already might have all of its neon equipment in good working order. If so, its expenses would only be for consumables. Yet even established companies would buy additional equipment if their business growth warranted it.

Also, if a company outsources most of its neon, it would have less need for capital investment. A $4.5 million company outsources its neon and only spent $2,500 on neon supplies.