Sales of electronic security products and systems in the U.S. are expected to increase 9.3 percent per year to US$17 billion in 2014. Growth will be driven in large part by a strong cyclical rebound in construction and capital investment spending from a low 2009 base, following a period of economic contraction and a tight credit environment. Ongoing technological improvements and falling prices will motivate customers to upgrade existing systems or install new ones. Ultimately, the main driver of demand for electronic security equipment is the perceived risk of crime. Americans' perception of crime risk has trended upward, despite the fact that actual crime rates have trended downward. These and other trends are presented in Electronic Security Systems, a new study from The Freedonia Group, a Cleveland-based industry market research firm.
Access controls represent the largest and fastest growing product segment. Demand for access controls is forecast to grow 12.8 percent annually through 2014. Advances will be driven by interest in automating security and thus reducing the need for traditional alternatives, such as keys and security personnel. Demand will also benefit from the continued roll-out of new technology, such as smart cards and biometrics, and the increasing adoption of these higher-value technologies. Relatively mature access control technologies, such as magnetic stripe cards and keypad systems, will continue to be used in many applications due to their low cost and simplicity. 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. 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.