Government regulations and a recovering economy are some of the factors that will drive the Middle East electronic security industry, which is forecasted to register a double-digit compound annual growth rate from 2017 to 2022, according to a report by Frost and Sullivan.
Government regulations and a recovering economy are some of the factors that will drive the Middle East physical security industry, which is forecasted to register a double-digit compound annual growth rate from 2017 to 2022, according to a
report by
Frost and Sullivan.
The report, Overview of the Middle East Commercial Security Market, forecasts the Middle East’s physical security market will grow at a CAGR of 16.5 percent, from US$2.6 billion in 2017 to $5.6 billion in 2022.
By segment under electronic security, video surveillance is anticipated to grow from $1.99 billion in 2017 to $4.45 billion in 2022 with a CAGR of 17.4 percent, due partly to mega events to be held in the region as well as stringent, surveillance-related regulations, the report said.
For access control, the revenue is expected to increase gradually from $0.38 billion in 2017 to $0.74 million in 2022 with a CAGR of 14.5 percent, with biometrics and card reader cited as the biggest growth sectors in the region, the report noted.
As for intrusion detection, it is at the growth stage with the wired segment holding the major share in the Middle East, the report said, adding the market is anticipated to grow from $0.24 billion in revenue in 2017 to $0.43 billion in 2022 with a CAGR of 12.2 percent.
Economic recovery
The report cited various drivers for this expected growth, including a booming construction industry backed by a recovering economy. “The Kingdom of Saudi Arabia (KSA) Vision 2030, Dubai Expo 2020, FIFA 2022, the stabilization of oil prices, and economic pickup in the next few years will all play vital roles in growth of the GCC construction industry,” the report said, citing MEED projects as saying the total construction value of projects either in planning or in deliver stage is more than $2.7 trillion.
According to the report, KSA, UAE and Qatar are strong contributors to the commercial security market in the Middle East. “KSA is the largest market with a revenue share of about $0.82 billion in 2017, but falling oil prices, reduced government spending, and low investment on infrastructure and monuments will affect the growth rate,” the report said. “UAE is the second-largest security market due to economic strength coupled with World Expo 2020, UAE’s Vision 2021, and infrastructure development. Qatar garnered approximately $0.28 billion in revenue in 2017. Qatar’s revenue growth is enhanced by favorable economic conditions and regulatory framework.”
Regulations-driven
The region being heavily regulations-driven is another factor that will contribute to an overall growth in security. According to the report, some of the regulations include 180-day video storage, mandate that schools in Abu Dhabi be equipped with security cameras, requirement that all buildings with permits to have four or more floors be placed with at least four surveillance cameras to monitor the interior and exterior areas of the construction site, a standard calling for 2 to 3 megapixels with wide dynamic range because of the strong sunlight, and requirements that automatic number plate recognition (ANPR) and facial recognition be featured in infrastructure projects.
Despite the positive growth prospects, challenges still remain. “The major market challenges and restraints are commoditization, duration of installation process, high cost set up, and lack of awareness,” the report said. “Security market growth is restricted by increasing competition from low-priced Chinese companies, which leads to product commoditization. Most companies are handling this by providing value-added services that will help differentiate from competitors.”
In addition, more and more users are using surveillance for more than just security, according to the report. “Video footage is being used to improve overall operational efficiency of organizations, especially in the hospitality and retail sectors. Customer interactions, store maintenance, and employee supervision are a few of the alternative surveillance uses,” it said.