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To expand service sector coverage in the Producer Price Index (PPI), the Bureau of Labor Statistics (BLS) introduced new price indexes for security guards and patrol servicesNorth American Industry Classification System (NAICS) 561612in July 2005. Data for these indexes, which date back to December 2004, will appear in table 5 of the PPI Detailed Report and are available online through the BLS website.
The security guards and patrol services industry comprises companies primarily engaged in providing guard and patrol services, including the prevention of unauthorized activity or entry, traffic regulation, access control, and fire and theft prevention and detection. Other security services such as roving patrol services, bodyguard services, and guard dog services also are included but are a very small portion of the industry. These services broadly may be described as the protection of personnel and assets. Excluded from this industry are security guard and patrol services that are performed in-house (known as proprietary security) by companies classified into other NAICS industries. An example of an in-house security service is a college or university that provides its own security and patrol services.
The index for security guards and patrol services measures changes in the revenue received by companies that provide security services. A security contract is selected, and the services provided by that contract are held fixed. Security contracts usually are long term but may not be binding because either party may terminate the contract with 30 days notice. Because current month prices are provided based on a fixed service level, most of the price changes are the result of changes in the billing rate. Price adjustments may occur either within the parameters of existing contracts or through contract renewals. For any given contract, a single composite billing rate may apply, or there may be multiple billing rates that apply to security personnel of various skill levels. This industry relies heavily on labor, so changes in local labor conditions are a major factor in price movements for this index.
Last Modified Date: January 3, 2006