Demand for security equipment projected to rise 7 percent a year through 2016
CLEVELAND—Global demand for security equipment will increase 7 percent annually to $117 billion in 2016, driven by a strong rebound in construction activity and advances in electronic security technology, according to a new report from The Freedonia Group.
The research company, based here, said electronic products accounted for nearly 65 percent of security equipment sales in 2011, with the segment expected to post much stronger sales gains than mechanical security products through 2016.
“Demand will be driven by the ongoing improvements in design that give electronic systems greater functionality, while also making them increasingly user-friendly and cost-effective,” the report stated. “Not only will these improvements help boost market penetration, they will also spur a strong replacement and upgrade market.”
The study analyzed residential and commercial applications. Products covered include locks and other mechanical security devices (fire extinguishers, safes, vaults, safety deposit boxes), access control and video surveillance systems, alarms (burglar, fire, panic/medical emergency, smoke, etc.), and other electronic security products (bomb and metal detectors, electronic article surveillance and anti-shoplifting systems, etc.).
Excluded were security services (including equipment installation and repair), structural security products (bars, doors, fences, gates and lighting), automotive security products, furniture and motor vehicle locks, information security hardware and software, and firearms and other weapons. Also excluded were security-type products utilized in non-security applications (biometric identification systems, video surveillance systems used for traffic control, medical monitoring, processing-plant metal detectors, etc.).
The fastest-growing markets for security equipment will be China, India, South Africa and Turkey, each of which will post growth of more than 9 percent annually through 2016, Freedonia said. The gains will result from rapid growth in gross domestic product, urban population and construction activity.
The maturity of the North American security market will slightly constrain growth there compared with the global average, but demand is still expected to rise 6.5 percent annually through 2016. The North American market will be supported by the economic rebound in the United States and increased penetration for security equipment in Mexico, the report said.
The commercial and industrial market accounted for nearly 65 percent of security equipment sales in 2011, and Freedonia expects that it will remain dominant through 2016. Gains in this market will be driven by construction activity and the moderating cost of many advanced electronic security products.
While commercial sales will maintain a larger market share, the strongest growth for security equipment will be in the residential sector, Freedonia reported. Residential demand will be stimulated by increasingly affordable systems and by a high perceived risk of crime.
“The generally lower crime rates in many countries over the past decade may begin to impact people’s fear of crime,” Freedonia analyst Dave Petina told Security Systems News. “However, media coverage of crime tends to downplay the falling rates.”
Petina said security installers and integrators can take advantage of the increasing demand by being aware of the latest technological trends, particularly in video surveillance and home automation.
“Being able to integrate alarm capabilities with other functionalities will be a key competitive advantage in many developed markets,” he said. “Even in less developed regions, this type of multifunctional system can provide market access.”
Petina said false alarms continue to be an important issue for the security industry, not only in the United States and Europe but also in less developed markets. Because of that, “systems that can reduce false alarms, whether through more sophisticated intrusion detection or video confirmation of events, can provide [a market] advantage.”