IMS Research has just published the second edition of its Middle East Market for CCTV and Video Surveillance Equipment report. The 2012 edition forecasts that the market in Saudi Arabia will grow strongly to overtake that of the United Arab Emirates (UAE) to become second largest in the region, after Turkey.
Market Analyst and report author, Oliver Philippou, states; “The reasons for the UAE los...
IMS Research has just published the second edition of its Middle East Market for CCTV and Video Surveillance Equipment report. The 2012 edition forecasts that the market in Saudi Arabia will grow strongly to overtake that of the United Arab Emirates (UAE) to become second largest in the region, after Turkey.
Market Analyst and report author, Oliver Philippou, states; “The reasons for the UAE loss in market position are that: Saudi Arabia has historically set conservative annual oil production forecasts, leaving surplus funding for social spending, including infrastructure, and health care projects; the UEA is a few years ahead of Saudi Arabia in terms of its transition from analogue to network video surveillance equipment; and the UAE is still feeling the effects of the financial crisis and a slowdown in construction projects”.
The Saudi Arabian government budgets and spending are very closely related to the oil production and, historically Saudi Arabia has set conservative annual oil production forecasts, leaving large surplus funds. Because of such a surplus, Saudi Arabia is currently making massive public expenditure on infrastructure and social projects. However, after record spending in 2011 in response to uprisings across the Arab world, and with an expected decrease in the price of a barrel of oil, Saudi Arabia is expecting a large decrease in its 2012 surplus.
The UAE has really led the way in terms of changing over from analogue to network video surveillance systems. However, this transition is now beginning to slow. Consequently, the Saudi Arabian market for network video surveillance equipment will grow by 25 percent a year from 2011 to 2016, compared with the UAE market which is forecast to grow by around 15 percent a year.
The global recession hit Saudi Arabia far less than most other countries, largely because of the conservative nature of the Islamic banking system. The UAE however, suffered more than most, because of its strong western banking connections, heavy investment in property, and limited oil supplies. The result was a dramatic slowdown in its booming construction industry. To date, there remains a lull in construction; this affects the video surveillance market, which is often dependent on large greenfield projects.
For these reasons, and the long lead time on major construction projects, Saudi Arabia is forecast to become the second largest regional market for CCTV and video surveillance equipment, its annual spend projected to overtake that of the UAE in 2016.