U.S. Demand for Security Products, Systems to Hit $17B by 2014
CLEVELAND—Sales of electronic security products and systems in the United States are expected to increase 9.3 percent each year to $17 billion in 2014, according to a new study by market research firm Freedonia Group Inc.
The “Electronic Security Systems” report states that growth will be driven in large part by a strong rebound in capital investment spending from a low 2009 base and a tight credit environment.
The report also notes that despite a decrease in crime rates, Americans believe the risk from criminal activity is high. This belief will ultimately drive the upgrading and installation of electronic security equipment along with technological improvements and price reductions.
Access control systems represent the largest and fastest growing product segment, according to the study. Demand for access control is forecast to grow 12.8 percent annually through 2014, due in part to new technologies such as smart cards, biometrics and the increasing adoption of higher-value technologies. Advances will be driven by interest in automating security, thus reducing the need for keys and security personnel. Moreover, magnetic stripe cards and keypad systems will continue to be used in many applications because of their low cost and simplicity, according to the report.
Demand for security-related CCTV products and systems is projected to increase 7 percent per year to $1.6 billion in 2014, from a low 2009 base, the report states. Growth will be fueled by a rebound in net fixed investment and overall economic activity. Sales of CCTV cameras and recording equipment will also benefit from technological advances in digital recording, image quality, computerized analysis and Internet-based monitoring.
New technology and declining equipment prices also will drive growth through increased automation of security and reduced need for security personnel to patrol a given area. Gains will also be supported by increasing use of verified alarm systems that incorporate CCTV systems (activated by motion sensors or the triggering of an alarm) in nonresidential and high-end residential applications to reduce costly false alarms, according to the study. Additionally, a growing number of municipalities require certain potentially high-risk businesses – such as 24-hour businesses, convenience stores and liquor stores – to operate CCTV systems as a condition of granting or renewing a business license.
In 2009, alarms accounted for the second largest share of electronic security equipment demand due to their widespread use in most markets. Sales of new alarms are forecast to increase 7.2 percent annually through 2014, driven by a cyclical recovery in business and consumer spending, especially residential building expenditures.
The consumer sector represented the largest market for electronic security equipment in 2009, with 26 percent of total demand, which was split about evenly between residential and automotive applications. This segment is projected to expand 8.5 percent per year through 2014, reflecting a cyclical rebound in consumer spending and motor vehicle production from a low 2009 base. The government and institutional market accounted for the second largest share of sales with 18 percent.
Furthermore, the report predicts that the fastest growing markets for electronic security equipment through 2014 will be the financial sector and the office and lodging sector, which are projected to grow at annual rates in excess of 11 percent.
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