New construction continues to be a driving force in the commercial fire market, garnering $600 milli

If you’ve been following the fire market closely, you not only know the market for commercial fire alarm systems is growing but you’re actually reaping the benefits from this burgeoning trend.

According to a new report, entitled “Domestic Fire Alarm Industry Report: Market and Influence Considerations” second edition, it is estimated that the market for the installation of commercial fire alarm systems in the United States is $3 billion, and will continue to ascend at a 3-percent to 5-percent pace. Because the market covers all categories of building occupancies, it will tend to be balanced by both upward and downward trends in the individual categories.

The study, conducted by FIREPRO(r) of Andover, Mass., and Sandra Jones and Co. of Chardon, Ohio, covers 11 categories of occupancy: Assembly, Education, Healthcare, Lodging, Manufacturing, Mercantile, Multi-Family/ Apartment, Office, Public, Religious and Warehouse. The largest segments are Office and Mercantile occupancies, which capture fewer than 25-percent and more than 19-percent marketshare, respectively.

These systems provide varying functions, such as providing automatic fire detection and alarm, manually activating a fire alarm, or monitoring fire protection systems like sprinkler systems, for alarm and supervision.

As new technology enables companies to expand their product and service offerings to the new construction market, dealers are also capitalizing on commercial upgrades and modernization.

Upgrades Soar in the Fire Market

The market has seen shifts during the past few years that have resulted in a net increase in the annual market. Further development in addressable and analog technologies has led to higher equipment costs, while reduced installation costs and the advent of the Americans with Disabilities Act (ADA) have resulted in increased requirements for alarm notification appliances and power supplies to support them.

In the future, there will be more use of voice evacuation systems, as the requirement for their use has been expanded to smaller assembly occupancies.

Fire Codes Influence Modernization

Many buildings that were constructed prior to the adoption of modern building codes were never equipped with fire alarm equipment. As these buildings age, they are modernized with new interiors, energy efficient glazing and air conditioning systems. When these buildings are upgraded for visual, environmental and occupant comfort, many building codes also trigger requirements that fire alarm and fire protection systems be installed. The trigger point in many of these codes is called substantial renovation.

The substantial renovation point is a monetary point where the money spent on voluntary modernization passes a defined threshold. After this threshold is met, it is deemed that the work on the building is not simply maintenance, and therefore, it is reasonable to expect the fire alarm systems and other fire protection features to be upgraded to a new building performance standard.

Facility Size Can Demand a Sophisticated System

Systems will be installed in buildings varying in size from less than 10,000 square feet of floor space to more than 500,000 square feet. Suppliers will find the amount of spending will be balanced throughout the demographics of building size; however, the majority of the systems will be required for small buildings (those less than 10,000 square feet in floor space).

The smaller building system functions will be mostly combined with security systems into a single control panel, while the larger systems will be standalone, full-function systems. Despite the fact building codes require many structures to have fully automatic fire detection and alarm systems, some buildings are not required to have a fire alarm systems at all.

How Will the Fire Market Pie Be Divided?

The $3 billion market value is the final installed cost that building owners will pay for the systems. The value-added chain for this market includes the installation cost; the cost of installation materials, such as wire, conduit, boxes and mounting hardware; the cost from the manufacturer of the equipment, and the cost from the distributor for designing the system and selling and handling the equipment.
In terms of the market-value split, 55 percent will go to the system installers, while approximately 28 percent will go to the system equipment manufacturers. The remaining 17 percent is divided between the distributors of the systems and the suppliers of the installation materials.

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