WWW.IBISWORLD.COM Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat 2 About this Industry 2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources 3 Industry at a Glance 4 Industry Performance 4 Executive Summary 4 Key External Drivers 5 Current Performance 7 Industry Outlook 9 Industry Life Cycle 11 Products & Markets 11 Supply Chain 11 Products & Services 13 Demand Determinants 13 Major Markets 15 International Trade 16 Business Locations 18 Competitive Landscape 18 Market Share Concentration 18 Key Success Factors 18 Cost Structure Benchmarks 20 Basis of Competition 21 Barriers to Entry 21 Industry Globalization 22 Major Companies 22 Securitas AB 23 G4S PLC 24 Allied Security LLC 27 Operating Conditions 27 Capital Intensity 28 Technology & Systems 28 Revenue Volatility 29 Regulation & Policy 29 Industry Assistance 30 Key Statistics 30 Industry Data 30 Annual Change 30 Key Ratios 31 Jargon & Glossary www.ibisworld.com 1-800-330-3772 info@ibisworld.com
WWW.IBISWORLD.COM Security Services in the US August 2012 2 About this Industry Industry Definition Main Activities The primary activities of this industry are Armored car services Bodyguard services Polygraph services Private detective services Security guard services The major products and services in this industry are Armored vehicle services Investigation services On-site security guard services Security personnel at special events Other services Similar Industries 56145 Credit Bureaus & Rating Agencies in the US The Credit Bureaus and Rating Agencies industry provides credit checks. 56162 Security Alarm Services in the US The Security Alarm Services industry sells, maintains, monitors and services security equipment, including burglar and fire alarms. Additional Resources For additional information on this industry www.sdmmag.com Security Distributing and Marketing www.securitymagazine.com Security Magazine USA www.census.gov US Census Bureau
WWW.IBISWORLD.COM Security Services in the US August 2012 3 Industry at a Glance Security Services in 2012 Key Statistics Snapshot Revenue $28.2bn Profit $2.3bn Annual Growth 07-12 -0.2% Annual Growth 12-17 4.2% Wages $16.3bn Businesses 40,874 Market Share % change Revenue vs. employment growth 6 4 2 0 2 % change Corporate profit 40 30 20 10 0 4 10 Key External Drivers Corporate profit Crime rate Value of private nonresidential construction Number of businesses p. 22 6 Year 04 06 08 10 12 14 16 Revenue Employment Products and services segmentation (2012) 16.3% Investigation services 18 20 Year 3% Security personnel 9.9% at special events 1.6% Armored vehicle Other services services 06 08 10 12 14 16 18 SOURCE: WWW.IBISWORLD.COM 69.2% On-site security guard services p. 4 SOURCE: SOURCE: WWW.IBISWORLD.COM WWW.IBISWORLD.COM Industry Structure Life Cycle Stage Mature Revenue Volatility Low Capital Intensity Low Industry Assistance None Concentration Level Low Regulation Level Technology Change Barriers to Entry Industry Globalization Competition Level Light Low Low Low High FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30
WWW.IBISWORLD.COM Security Services in the US August 2012 4 Industry Performance Executive Summary Key External Drivers Current Performance Industry Outlook Life Cycle Stage Executive Summary Key External Drivers Corporate profit Crime rate
WWW.IBISWORLD.COM Security Services in the US August 2012 5 Industry Performance Key External Drivers continued Value of private nonresidential construction Number of businesses Corporate profit 40 Crime rate 4200 % change 30 20 10 0 10 20 Year 06 08 10 12 14 16 18 Crimes per 100,000 people 4000 3800 3600 3400 3200 3000 Year 03 05 07 09 11 13 15 17 SOURCE: WWW.IBISWORLD.COM Current Performance
WWW.IBISWORLD.COM Security Services in the US August 2012 6 Industry Performance Continuing demand % change Industry revenue 6 4 2 0 2 4 6 Year 04 06 08 10 12 14 16 18 SOURCE: WWW.IBISWORLD.COM Hard times bring consolidation
WWW.IBISWORLD.COM Security Services in the US August 2012 7 Industry Performance Hard times bring consolidation continued Competition causes alarm Industry Outlook More businesses, more demand
WWW.IBISWORLD.COM Security Services in the US August 2012 8 Industry Performance More businesses, more demand continued Competition growing
WWW.IBISWORLD.COM Security Services in the US August 2012 9 Industry Performance Life Cycle Stage % Growth of profit/gdp 30 25 Maturity Company consolidation; level of economic importance stable Quality Growth High growth in economic importance; weaker companies close down; developed technology and markets Key Features of a Mature Industry Revenue grows at same pace as economy Company numbers stabilize; M&A stage Established technology & processes Total market acceptance of product & brand Rationalization of low margin products & brands 20 15 10 Quantity Growth Many new companies; minor growth in economic importance; substantial technology change 5 0 Security Services Shake-out Credit Bureaus & Rating Agencies Non-Hotel Casinos Electronic & Computer Repair Services Security Alarm Services 5 Decline Crash or Grow? Shake-out Potential Hidden Gems Future Industries Time Wasters Hobby Industries 10 10 5 0 5 10 15 20 25 30 % Growth of establishments SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 10 Industry Performance Industry Life Cycle This industry is Mature
WWW.IBISWORLD.COM Security Services in the US August 2012 11 Products & Markets Supply Chain Products & Services Demand Determinants Major Markets International Trade Business Locations Supply Chain KEY BUYING INDUSTRIES 23 Construction in the US Security service companies provide construction firms with guards for residential and non-residential construction sites and materials. 31-33 Manufacturing in the US Manufacturing companies require security services to limit access, guard inventory and provide monitoring services. 44-45 Retail Trade in the US Retail stores use security services for inventory control, cash transfers and in-store video monitoring services. 48-49 Transportation and Warehousing in the US Public transportation companies require security services for passenger safety. 52 Finance and Insurance in the US Security service companies provide banks with security associated with cash transfers, ATMs and general patrol. 71321 Non-Hotel Casinos in the US Casinos use security service firms for cash transfers, particularly from slot machines, and general and monitored security. 72112 Casino Hotels in the US Casinos use security service firms for cash transfers, particularly from slot machines, and general and monitored security. 92 Public Administration in the US Schools, universities, health and hospital facilities and courts and prisons in the public sector demand security services from the industry. KEY SELLING INDUSTRIES 33431 Audio & Video Equipment Manufacturing in the US The Audio and Video Equipment Manufacturing industry provides firms with security equipment. 56162 Security Alarm Services in the US The Security Alarm Services industry supplies security systems to operators. 81121 Electronic & Computer Repair Services in the US The Electronic and Computer Repair Services industry provides security service firms with repair and maintenance services of electronic security equipment. Products & Services Security guard services
WWW.IBISWORLD.COM Security Services in the US August 2012 12 Products & Markets Products & Services continued Products and services segmentation (2012) 3% Security personnel 9.9% at special events 1.6% Armored vehicle Other services services 16.3% Investigation services 69.2% On-site security guard services Total $28.2bn SOURCE: WWW.IBISWORLD.COM Investigation services Armored vehicles
WWW.IBISWORLD.COM Security Services in the US August 2012 13 Products & Markets Products & Services continued Other Demand Determinants Major Markets
WWW.IBISWORLD.COM Security Services in the US August 2012 14 Products & Markets Major Markets continued Major market segmentation (2012) 16% Government clients 9% 5% Residential clients Other clients 26% Major corporations Total $28.2bn 21% Financial institutions 23% Retail clients SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 15 Products & Markets International Trade
WWW.IBISWORLD.COM Security Services in the US August 2012 16 Products & Markets Business Locations 2012 West AK 0.5 New England West CA 16.2 WA 1.5 MT 0.2 OR 0.6 NV 1.7 Rocky Mountains ID 0.2 UT 0.5 AZ 1.7 WY 0.1 CO 2.2 NM 0.7 ND Plains NE 0.3 MN 0.1 1.2 WI SD 0.2 KS 0.4 Southwest TX 6.5 OK 1.2 IA OH 9 0.3 2.8 IL IN VA 4.2 1.2 WV 0.4 6.4 KY 0.6 MO 1.4 Great Lakes 0.7 MI 2.0 PA 3.2 AR 0.4 MS 0.5 LA 1.5 TN 2.9 Southeast AL 1.0 Mid- Atlantic GA 2.9 NY NC 2.2 SC 1.4 FL 6.4 1 9.4 5 6 7 8 ME 0.2 2 3 4 West HI 0.9 Additional States (as marked on map) 1VT 2 NH 3MA 4 RI 0.1 0.2 1.8 0.3 5 CT 6 NJ 7DE MD 1.1 3.3 0.3 8 9DC 3.1 0.9 Revenue (%) Less than 3% 3% to less than 10% 10% to less than 20% 20% or more SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 17 Products & Markets Business Locations Revenue vs. population Revenue vs. establishments 30 30 20 20 % 10 0 West Great Lakes Mid-Atlantic New England Plains Rocky Mountains Southeast Southwest % 10 0 West Great Lakes Mid-Atlantic New England Plains Rocky Mountains Southeast Southwest Revenue Population Revenue Establishments SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 18 Competitive Landscape Market Share Concentration Key Success Factors Cost Structure Benchmarks Basis of Competition Barriers to Entry Industry Globalization Market Share Concentration Level Concentration in this industry is Low Enterprises by employment size (2012) No. of employees Share (%) 0 to 4 51.8 5 to 9 12.5 10 to 19 11.5 20 to 99 16.6 100 to 499 5.5 500+ 2.1 SOURCE: US CENSUS BUREAU AND IBISWORLD Key Success Factors IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are: Ability to compete on tender Fast adjustments made to changing regulations Close monitoring of competition Access to multiskilled and flexible workforce Having a good reputation Use of most efficient work practices Cost Structure Benchmarks
WWW.IBISWORLD.COM Security Services in the US August 2012 19 Competitive Landscape Cost Structure Benchmarks continued Profit Wages Sector vs. Industry Costs Average Costs of all Industries in sector (2012) Industry Costs (2012) Percentage of revenue 100 80 60 40 20 2.9 6.9 52.8 13.2 4.7 2.4 17.1 8.1 57.9 3.6 0.6 4.0 3.0 22.8 Profit Wages Purchases Depreciation Marketing Rent & Utilities Other 0 SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 20 Competitive Landscape Cost Structure Benchmarks continued Other Basis of Competition Level & Trend Competition in this industry is High and the trend is Increasing Internal competition External competition
WWW.IBISWORLD.COM Security Services in the US August 2012 21 Competitive Landscape Barriers to Entry Level & Trend Barriers to Entry in this industry are Low and Increasing Barriers to Entry checklist Competition Concentration Life Cycle Stage Capital Intensity Technology Change Regulation & Policy Industry Assistance Level High Low Mature Low Low Light None SOURCE: WWW.IBISWORLD.COM Industry Globalization Level & Trend Globalization in this industry is Low and the trend is Steady
WWW.IBISWORLD.COM Security Services in the US August 2012 22 Major Companies Securitas AB G4S PLC Allied Security LLC Other Companies Major players (Market share) G4S PLC 9.7% 71.9% Other Allied Security LLC 5.8% Securitas AB 12.6% SOURCE: WWW.IBISWORLD.COM Player Performance Securitas AB Market share: 12.6% Industry Brand Names Securitas Security Services USA Securitas AB (Security Services North America segment) fi nancial performance Year Revenue ($ million) (% change) Operating Income ($ million) (% change) 2007 3,119.7 N/C 166.2 N/C 2008 3,216.7 3.1 182.2 9.6 2009 3,098.2-3.7 181.8-0.2 2010 3,318.7 7.1 201.5 10.8 2011 3,460.7 4.3 196.6-2.4 2012* 3,560.0 2.9 205.0 4.3 *Estimate SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM Security Services in the US August 2012 23 Major Companies Player Performance continued Player Performance G4S PLC Market share: 9.7% G4S PLC (North America segment) financial performance Year Revenue ($ million) (% change) Operating Income ($ million) (% change) 2007 2,245.6 N/C 80.4 N/C 2008 2,429.0 8.2 67.4-16.2 2009 2,496.2 2.8 78.1 15.9 2010 2,590.8 3.8 87.6 12.2 2011 2,649.6 2.3 142.7 62.9 2012* 2,726.5 2.9 146.9 2.9 *Estimate SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM Security Services in the US August 2012 24 Major Companies Player Performance continued Player Performance Allied Security LLC Market share: 5.8% Industry Brand Names AlliedBarton Security Services AlliedBarton Security Services (US segment) financial performance Year Revenue ($ million) (% change) Operating Income ($ million) (% change) 2007 1,484.7 17.7 47.6 63.0 2008 1,607.3 8.3 59.6 25.2 2009* 1,526.9-5.0 45.8-23.2 2010* 1,543.7 1.1 39.0-14.8 2011* 1,575.0 2.0 49.0 25.6 2012* 1,635.0 3.8 52.0 6.1 *Estimate SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM Security Services in the US August 2012 25 Major Companies Player Performance continued Other Companies The Brink s Company Estimated market share: 2.7% Loomis AB Estimated market share: 2.3%
WWW.IBISWORLD.COM Security Services in the US August 2012 26 Major Companies Other Companies continued
WWW.IBISWORLD.COM Security Services in the US August 2012 27 Operating Conditions Capital Intensity Technology & Systems Revenue Volatility Regulation & Policy Industry Assistance Capital Intensity Level The level of capital intensity is Low Capital intensity Capital units per labor unit 0.5 0.4 0.3 0.2 0.1 0.0 Economy Administration, Business Support & Waste Management Services Security Services Dotted line shows a high level of capital intensity SOURCE: WWW.IBISWORLD.COM Tools of the Trade: Growth Strategies for Success New Age Economy Recreation, Personal Services, Health and Education. Firms benefit from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labor skills are key to product differentiation. Investment Economy Information, Communications, Mining, Finance and Real Estate. To increase revenue firms need superior debt management, a stable macroeconomic environment and a sound investment plan. Labor Intensive Traditional Service Economy Wholesale and Retail. Reliant on labor rather than capital to sell goods. Functions cannot be outsourced therefore firms must use new technology or improve staff training to increase revenue growth. Electronic & Computer Repair Services Security Services Security Alarm Services Credit Bureaus & Rating Agencies Non-Hotel Casinos Old Economy Audio & Video Equipment Manufacturing Agriculture and Manufacturing. Traded goods can be produced using cheap labor abroad. To expand firms must merge or acquire others to exploit economies of scale, or specialize in niche, high-value products. Capital Intensive Change in Share of the Economy SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 28 Operating Conditions Capital Intensity continued Technology & Systems Level The level of Technology Change is Low Revenue Volatility Level The level of Volatility is Low A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment. When a firm makes poor investment decisions it may face underutilized capacity if demand suddenly falls, or capacity constraints if it rises quickly. Revenue volatility* (%) Volatility vs Growth 1000 Hazardous Rollercoaster 100 10 Security Services 1 0.1 Stagnant Blue Chip 30 10 10 30 50 70 Five year annualized revenue growth (%) * Axis is in logarithmic scale SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 29 Operating Conditions Revenue Volatility continued Regulation & Policy Level & Trend The level of Regulation is Light and the trend is Increasing Industry Assistance Level & Trend The level of Industry Assistance is None and the trend is Steady
WWW.IBISWORLD.COM Security Services in the US August 2012 30 Key Statistics Industry Data Revenue ($m) Industry Value Added ($m) Establishments Enterprises Employment Exports Imports Wages ($m) Domestic Demand Number of Businesses With Employees (Million) 2003 25,317.6 18,426.5 54,500 40,573 666,497 -- -- 15,034.0 N/A 7.3 2004 25,839.6 18,752.0 55,154 40,978 692,761 -- -- 15,289.5 N/A 7.4 2005 26,533.9 19,557.6 55,816 41,388 706,819 -- -- 16,002.1 N/A 7.5 2006 27,616.4 20,021.1 56,374 41,760 716,075 -- -- 16,375.7 N/A 7.6 2007 28,517.6 20,464.1 56,938 42,178 721,876 -- -- 16,756.8 N/A 7.7 2008 27,771.0 19,759.0 57,379 42,629 725,119 -- -- 16,343.3 N/A 7.6 2009 26,407.7 18,675.5 55,601 41,459 701,074 -- -- 15,506.6 N/A 7.5 2010 26,852.5 18,823.6 55,329 41,352 700,920 -- -- 15,735.6 N/A 7.6 2011 27,394.3 19,296.5 55,250 41,201 699,585 -- -- 16,036.6 N/A 7.6 2012 28,189.0 19,732.3 54,853 40,874 703,034 -- -- 16,321.4 N/A 7.7 2013 29,649.2 20,585.4 55,829 41,509 709,387 -- -- 16,997.9 N/A 7.9 2014 30,988.7 21,341.9 57,144 42,424 728,836 -- -- 17,592.3 N/A 8.0 2015 32,318.6 22,080.1 57,898 42,919 738,638 -- -- 18,137.2 N/A 8.1 2016 33,216.8 22,896.3 60,089 44,544 771,052 -- -- 18,810.7 N/A 8.2 2017 34,628.0 23,799.8 62,549 46,402 798,570 -- -- 19,540.6 N/A 8.3 Sector Rank 8/26 6/26 6/26 6/26 6/26 N/A N/A 6/26 N/A N/A Economy Rank 275/706 129/706 108/705 121/705 54/706 N/A N/A 89/706 N/A N/A Annual Change Revenue (%) Industry Value Added (%) Establishments (%) Enterprises (%) Employment (%) Exports (%) Imports (%) Wages (%) Domestic Demand (%) Number of Businesses With Employees (%) 2004 2.1 1.8 1.2 1.0 3.9 N/A N/A 1.7 N/A 1.4 2005 2.7 4.3 1.2 1.0 2.0 N/A N/A 4.7 N/A 1.4 2006 4.1 2.4 1.0 0.9 1.3 N/A N/A 2.3 N/A 1.3 2007 3.3 2.2 1.0 1.0 0.8 N/A N/A 2.3 N/A 1.3 2008-2.6-3.4 0.8 1.1 0.4 N/A N/A -2.5 N/A -1.3 2009-4.9-5.5-3.1-2.7-3.3 N/A N/A -5.1 N/A -1.3 2010 1.7 0.8-0.5-0.3 0.0 N/A N/A 1.5 N/A 1.3 2011 2.0 2.5-0.1-0.4-0.2 N/A N/A 1.9 N/A 0.0 2012 2.9 2.3-0.7-0.8 0.5 N/A N/A 1.8 N/A 1.3 2013 5.2 4.3 1.8 1.6 0.9 N/A N/A 4.1 N/A 2.6 2014 4.5 3.7 2.4 2.2 2.7 N/A N/A 3.5 N/A 1.3 2015 4.3 3.5 1.3 1.2 1.3 N/A N/A 3.1 N/A 1.3 2016 2.8 3.7 3.8 3.8 4.4 N/A N/A 3.7 N/A 1.2 2017 4.2 3.9 4.1 4.2 3.6 N/A N/A 3.9 N/A 1.2 Sector Rank 19/26 20/26 24/26 24/26 23/26 N/A N/A 17/26 N/A N/A Economy Rank 299/706 402/706 528/705 511/705 491/706 N/A N/A 356/706 N/A N/A Key Ratios IVA/Revenue (%) Imports/ Demand (%) Exports/Revenue (%) Revenue per Employee ($ 000) Wages/Revenue (%) Employees per Est. Average Wage ($) Share of the Economy (%) 2003 72.78 N/A N/A 37.99 59.38 12.23 22,556.74 0.16 2004 72.57 N/A N/A 37.30 59.17 12.56 22,070.38 0.15 2005 73.71 N/A N/A 37.54 60.31 12.66 22,639.60 0.15 2006 72.50 N/A N/A 38.57 59.30 12.70 22,868.69 0.15 2007 71.76 N/A N/A 39.50 58.76 12.68 23,212.85 0.15 2008 71.15 N/A N/A 38.30 58.85 12.64 22,538.78 0.15 2009 70.72 N/A N/A 37.67 58.72 12.61 22,118.35 0.15 2010 70.10 N/A N/A 38.31 58.60 12.67 22,449.92 0.14 2011 70.44 N/A N/A 39.16 58.54 12.66 22,923.02 0.14 2012 70.00 N/A N/A 40.10 57.90 12.82 23,215.66 0.15 2013 69.43 N/A N/A 41.80 57.33 12.71 23,961.39 0.15 2014 68.87 N/A N/A 42.52 56.77 12.75 24,137.53 0.15 2015 68.32 N/A N/A 43.75 56.12 12.76 24,554.92 0.15 2016 68.93 N/A N/A 43.08 56.63 12.83 24,396.15 0.15 2017 68.73 N/A N/A 43.36 56.43 12.77 24,469.49 N/A Sector Rank 5/26 N/A N/A 24/26 5/26 11/26 23/26 6/26 Economy Rank 24/706 N/A N/A 684/706 15/706 367/705 597/706 129/706 Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data. SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Security Services in the US August 2012 31 Jargon & Glossary Industry Jargon BIOMETRICS A technology that involves the use of face, fingerprint or similar recognition of individuals to allow secure access. CLOSED-CIRCUIT TELEVISION (CCTV) A technology that uses video surveillance equipment to transmit images to a specific set of monitors. MONITORED SECURITY SYSTEM A security system that involves the use of video, such as CCTV systems. IBISWorld Glossary BARRIERS TO ENTRY Barriers to entry can be High, Medium or Low. High means new companies struggle to enter an industry, while Low means it is easy for a firm to enter an industry. CAPITAL/LABOR INTENSITY An indicator of how much capital is used in production as opposed to labor. Level is stated as High, Medium or Low. High is a ratio of less than $3 of wage costs for every $1 of depreciation; Medium is $3 $8 of wage costs to $1 of depreciation; Low is greater than $8 of wage costs for every $1 of depreciation. CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using 2012 as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the real growth or decline in industry metrics. The inflation adjustments in IBISWorld s reports are made using the US Bureau of Economic Analysis implicit GDP price deflator. DOMESTIC DEMAND The use of goods and services within the US; the sum of imports and domestic production minus exports. EARNINGS BEFORE INTEREST AND TAX (EBIT) IBISWorld uses EBIT as an indicator of a company s profitability. It is calculated as revenue minus expenses, excluding tax and interest. EMPLOYMENT The number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees. ENTERPRISE A division that is separately managed and keeps management accounts. The most relevant measure of the number of firms in an industry. ESTABLISHMENT The smallest type of accounting unit within an Enterprise; usually consists of one or more locations in a state or territory of the country in which it operates. EXPORTS The total sales and transfers of goods produced by an industry that are exported. IMPORTS The value of goods and services imported with the amount payable to non-residents. INDUSTRY CONCENTRATION IBISWorld bases concentration on the top four firms. Concentration is identified as High, Medium or Low. High means the top four players account for over 70% of revenue; Medium is 40 70% of revenue; Low is less than 40%. INDUSTRY REVENUE The total sales revenue of the industry, including sales (exclusive of excise and sales tax) of goods and services; plus transfers to other firms of the same business; plus subsidies on production; plus all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded. INDUSTRY VALUE ADDED The market value of goods and services produced by an industry minus the cost of goods and services used in the production process, which leaves the gross product of the industry (also called its Value Added). INTERNATIONAL TRADE The level is determined by: Exports/Revenue: Low is 0 5%; Medium is 5 20%; High is over 20%. Imports/Domestic Demand: Low is 0 5%; Medium is 5 35%; and High is over 35%. LIFE CYCLE All industries go through periods of Growth, Maturity and Decline. An average life cycle lasts 70 years. Maturity is the longest stage at 40 years with Growth and Decline at 15 years each. NON-EMPLOYING ESTABLISHMENT Businesses with no paid employment and payroll are known as non-employing establishments. These are mostly set-up by self employed individuals. VOLATILITY The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: Very High is greater than ±20%; High Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility is less than ±3%. WAGES The gross total wages and salaries of all employees of the establishment.
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