World demand for security equipment is projected to climb 7.4 percent annually through 2014 to nearly US$100 billion. In general, the strongest market gains will be posted in developing parts of Asia, eastern Europe, Africa and the Middle East and central and southern America where security markets are relatively underdeveloped. In these regions, product demand will be fueled by generally strong economic environments, new business formation, foreign investment activity, increased urbanization, growing middle- and upper-class populations and increasing perceived risk of criminal activity. As a result, these developing regions will increasingly have both the need for and means to invest in security products. Additionally, intensity of product use (measured against indicators such as GDP, building construction spending, urban population and the size of the 15 to 24 years male population segment) is relatively low in these regions, indicating significant growth potential going forward. While most of these countries are still growing from a small base,
China's gains stem from a larger base as it surpassed Japan to become the world's second largest security equipment market in 2009. China, India, Russia and Turkey are projected to register some of the strongest sales gains, each posting double-digit growth through 2014.
North America is also expected to see total gains well above the global average through 2014. Advances will be driven by rapid growth in the U.S. where security equipment spending will benefit from 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. Gains in western Europe and Japan will be more modest. While these markets will also experience growth resulting from improving economic conditions, rising business and personal incomes and ongoing concerns about crime, the relative maturity of most security equipment markets in developed areas will constrain future increases in demand.
In 2009, electronic security products accounted for more than 60 percent of total security equipment demand. These products are also expected to post much stronger sales advances than mechanical security equipment through
2014. Demand will be driven by the ongoing improvements in design that give electronic systems greater functionality, while also making electronic systems increasingly user-friendly and cost-effective. Continuing innovations will also spur a strong replacement and upgrade market.
However, sales of locks and other mechanical security goods will increase as well, bolstered by improving economic climates in developing parts of the world where these products have not yet reached market maturity.
Construction gains in the U.S., Japan and other developed countries will also boost advances as conventional locks are commonly used in virtually every building. Value growth will be further supported by increased market penetration of higher value security products such as electromagnetic locks.
The commercial and industrial security equipment market is by far the largest, with nearly 65 percent of sales in 2009. The dominance of this market reflects its size, potential for loss and availability of significant resources for protective purposes. The smaller government and institutional market for security products benefits from the heightened level of security consciousness that prevails in the current era, with government agencies providing security in public places and within government operated facilities. However, the strongest growth will be recorded in the residential security market, stimulated by a high perceived risk of crime among residents in many areas and supported by the increasingly affordable nature of security equipment.
In 2009, the top six manufacturers including Assa Abloy, United
Technologies, Honeywell Security, Tyco Fire & Security
, Bosch Security Systems and Ingersoll-Rand accounted for approximately one-quarter of all security product sales value. Smaller suppliers operate within a variety of product and geographic niches as well.