The market for electronic equipment is not growing at such a prodigious rate as in recent years, but contrasting figures show that some sectors are doing well in a period of general cooling...

Industry analyst MBD has just published its development report on the UK security equipment market which claims that while access control is predicted to have a healthy growth over the next five years, CCTV will increase at more moderate levels compared to recent years and demand for intruder alarms is predicted to decline. In summary:

Restricted market

The development of the UK security equipment market has remained largely restricted during the five years up to 2006, says the report.

Consumption declined by 1 per cent in 2004 and again in 2005 while nominal growth of 2 per cent is projected to take sales to 拢499.7 million by the end of the current year.

However, as this figure is based on incomplete production data, MBD estimates the actual market size for security alarms and systems will be at 拢1106.7 million during 2006. This is equivalent to a 1 per cent increase in the year.

Compared with 2002, however, this still represents a moderate 2 per cent decline in nominal terms.

The restricted market development is partly due to the "maturity in a number of sectors, most notably intruder alarms".

Intense competition

Intense price competition across many sectors has also hindered stronger market development. However, the moderate increase projected for the current year partly reflects an increase in construction output in the offices, education, industrial and public housing sectors during the year.

The market has shown some conflicting trends during recent years. While it has remained highly price competitive, and with some sectors reaching a level of maturity, market growth has been generated in other sectors, most notably access control equipment. This is mainly due to the availability of high technology equipment.

The market has also been constrained by the growing popularity of rental systems and by the changing emphasis of requirements between the commercial/industrial and residential markets.

Forecast from 2007 to 2011

The UK market is expected to demonstrate year on year real growth up to 2011, albeit at moderate levels. Annual growth levels are not expected to exceed 1 per cent in real terms. Overall, the value of the market, including sales and rental income, is anticipated to increase by 3 per cent in real terms between the current year and 2011. Market development is expected to remain restricted by increased price competition and due to a number of security equipment sectors reaching a level of maturity .

However some sectors of the market are expected to continue to show strong growth potential boosted by technology changes.

Alarms decline predicted

Income derived from the intruder alarms sector is expected to decline in real terms over the five year forecast period up to 2001, says the report.

"Intruder alarms are believed to represent one of the the more mature sectors of the security alarms and systems market," says the report. "An element of the lack of growth in this sector reflects increased competition from other areas of the security equipment sector and an element from the intense price competition that continues to prevail within the sector." Overall, demand for intruder alarms is forecast to decline by 12 per cent between 2006-11.

'More moderate' CCTV

Demand for CCTV is expected to continue to increase, albeit at more moderate levels than recorded in recent years. This is mainly due to increased price competition in the sector as well as due to the completion of the major city centre CCTV schemes.

"The strongest growth potential in this market is expected to exist in digital and IP enabled systems which will replace analogue installations," says the report. Overall, the UK market for CCTV is forecast to increase by 5 percent in real terms between 2006 and 2011 with the value reaching an estimated 拢1134 million at 2006 prices by 2011.

Access control growth

In the access control sector income is expected to increase year on year up to 2011 and is expected to continue to represent one of the strongest growth sectors. Overall demand for access control systems is expected to increase by 10 per cent in real terms between the current year and 2011. New technologies and higher value installations are expected to drive market development.

Integrated systems

The integrated systems sector is expected to increase throughout the five year forecast period with growth exceeding that of the overall market development. The share of the sector to the total market is expected to increase from 9 per cent in 2006 to 10 per cent by 2011.

Manned security increases

MBD has also released its development report on the manned security market which is said to have increased throughout the five year period to 2006. During the beginning of the period strong annual growth levels of between 9-12 per cent were recorded but in 2005 growth was at a more moderate 5 per cent.

For 2006 MBD predicts a 4 per cent increase taking the market to 拢3063 million.

The market is forecast to increase by 13 per cent up to 2011 thanks to growth in the custodial services sector and cash in transit.

Source

Security Installer

Postscript

The Security Equipment Development Report, published by Market and Business Development, is available from MBD, 5 Oxford Court, Manchester M2 3WQ (tel 0161 236 6845)at 拢550.