CLEVELAND — A new study by research firm Freedonia Group Inc. reveals that revenues for private contract security services in the United States will increase nearly 5 percent annually to $63 billion in 2014.
Titled “Private Security Services,” the report states that growth will be fueled by a recurring recovery in construction and business expansion from a depressed 2009 base. Technological innovations will also boost spending as improved reliability and user-friendliness encourage investment in alarm services and systems integration. Additionally, some businesses, institutions and agencies will continue to shift toward outsourcing security services.
Guarding is the largest security service segment, accounting for 40 percent of total industry revenue and 67 percent of employment in 2009, according to the study. Although this segment is relatively mature, demand will be supported by increasing specialization and outsourcing. The second largest service segment is alarm monitoring, which accounted for 30 percent of total industry revenue and 10 percent of employment in 2009. Through 2014, above-average demand for alarm monitoring is expected to be fueled by a recovery in residential construction.
The fastest-growing service segment is forecast to be pre-employment screening, which will advance nearly 10 percent annually from a low 2009 base. Between 2009 and 2014, a net employment gain of 11.2 million is forecast for the U.S., compared with only about 500,000 between 2004 and 2009. As the economy recovers, there will also be increased job turnover. Employers will turn increasingly to outside screening service providers, because hiring-related liability concerns have increased and the technology and regulations surrounding pre-employment screening have grown more complex, the report states.
Other fast-growing service segments include systems integration and security consulting. These services will benefit from rapid advances in electronic technology, which will encourage investment in new security and building technology systems. This will in turn require experienced service providers to maximize benefits and avoid potential security breaches. Revenues in these security segments were especially low in 2009, as businesses deferred non-essential spending, according to the report.