US security industry growth outpaces GDP growth

US security industry growth outpaces GDP growth
Despite the backdrop an unfavorable economic climate, the security industry in the U.S. in general is outperforming expectations, with video-related products driving growth, according to trade associations, which on the whole are optimistic about where the security industry is going.
 
The Security Industry Association (SIA) is the leading trade association in the electronic physical security arena. It has more than 800 corporate and organizational members, and produces a bimonthly security market index (SMI). The index measures the current thoughts and future expectations of the security industry’s executives.
 
The latest SMI index stands at 60 – a little down from the beginning of the year but still positive. Any score above 50 indicates conditions within the industry are largely positive and that security professionals hold predominantly confident outlooks.
 
“If we look at the SMI we see the industry in the U.S. has been growing steady for a few years. There are of course ‘ups and downs’ in the confidence indicator, but overall it is positive,” said Geoff Kohl, Senior Director of Marketing at SIA.
 
The latest dip has been attributed to tariffs and the U.S.-China trade war. People had doubts but the market managed to sustain the setback, Kohl explained. “The global economy is always something that influences the industry. As long as the economy in general is growing, there will be investment that will require security.”
 
SIA’s latest poll found that 78 percent of respondents had a positive outlook for the next three months, while 16 percent predicted no change in their business environment and 6 percent responded that they expected a slight decline in business.
 
Product-wise, video surveillance continued to be a growth driver. “Video growth is outpacing all others, the applications for video as a sensor are very strong and there is a lot of consumer demand for it,” Kohl said.
 
The quality of the feeds is getting better as are management tools that provide actionable data. “Analytics and AI (artificial intelligence) are definitely influential in driving this forward,” Kohl noted.

Strongest verticals

Education is a very strong vertical in the U.S., amid growing awareness of school security. The SIA is supporting system integrators in getting grant funding for school security.
 
The security industry is also tied to the development of commercial office space, according to Kohl. “When new construction slowed 10 years ago, the security industry also slowed.” But now the commercial sector’s growth is fueling the security industry. “There are continuous upgrades of older install base to higher-quality, more advanced equipment. Cybersecurity is also helping in the refresh cycle as it prompted people to upgrade systems,” Kohl explained.
 
With regards to the low-end segment of the commercial market, the industry is finding ways to add value, like through analytics, and this will change the commoditized state of the segment.

System integrators express confidence

PSA Security Network, the world’s largest systems integrator consortium made up of about 200 security integrators and 100 professional audio-visual integrators, is also upbeat about the future .
 
Contrary to what occurred in recent years, growth in video is a little faster than that of access control. PSA forecasts that video will grow between 8 and 9 percent, while access control will grow at about 7 percent.
 
“Video growth is due to improvement in bandwidth, storage and also AI is supporting video. All in all, the security industry is growing faster than the general economy,” said Bill Bozeman, President and CEO of PSA Security Network.


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