Growth of access control-equipment market in major mature European and Russian markets between 2014 and 2019 is expected to mark a marginal increase, as terrorism-related concerns boost demand in the relatively untapped French market.
Growth of access control-equipment market in major mature European and Russian markets between 2014 and 2019 is expected to show marginal improvement, as terrorism-related concerns boost demand in the relatively untapped French market.
According to a country-level analysis report from IHS, the combined compound annual growth rate (CAGR) forecast for Germany, Russia, United Kingdom and France from 2014 to 2019 rose from 5.3 percent to 5.4 percent.
The French market is the main driver behind the change as multiple terrorist attacks in the last year has increased security awareness and boosted debates on safety in the country. Growth-estimates between 2015 and 2019 for the French access control market alone rose from 3.9 percent to 5 percent. It will continue to be a target market for international suppliers through 2019, especially for electronic locks.
After the Nov 13 Paris attacks, French Prime Minister Manuel Vallis had indicated the country would boost its security spending, to the extent it would miss the European Union deficit targets. A report from Reuters suggests France’s extra security spending would run to hundreds of millions of euros, but would be less than 1 billion.
“Due in large part to the recent terrorist attacks in France, securing access to public places and accenting citizen safety in that country has become a priority,” the release from IHS read. “Development of governmental systems for access control is likely to receive backing from both the public and the parliament; however, any growth in the government sector will take time to develop, so short-term growth is not expected for government applications.”
But the increased demand in France is expected to be offset by a weak outlook in the Russian market, which continues to be a challenge for international suppliers mainly because of the exchange-rate volatility.
The Russian market contracted 5.3 percent in 2015 and will shrink by another 1.9 percent this year. Its CAGR forecast between 2015 and 2019 fell from 2.6 percent to 0.3 percent. The country continues to be hurt by the falling global oil prices as well, which, as of this week tumbled below US$33 per barrel.
Russia’s macroeconomic conditions will largely dictate its access control market growth in the future. If the oil prices continue to fall, exchange rate weakens and competition rises the market will remain unfavorable to international suppliers.