World Security Equipment

World demand to rise 7.0% annually through 2016
World demand for security equipment will advance 7.0 percent annually to $117 billion in 2016. The fastest gains will be in parts of Asia, Eastern Europe, Africa and the Middle East where security markets are underdeveloped. Gains will be fueled by economic growth, business formation, foreign investment activity, urbanization, and growing middle and upper class populations. Thus, these developing regions will increasingly have both the need for and means to invest in security products.

China, India among fastest growing national markets
Among individual countries, the fastest increases in security equipment demand will be in China, India, South Africa and Turkey, which will each see growth in excess of nine percent annually through 2016. These markets will benefit from fast growth in GDP, urban population and building construction activity. In addition, despite rapid growth over much of the past decade, the use of many types of security equipment in these countries remains low compared to mature markets.

Security equipment demand in North America is expected to rise 6.5 percent annually through 2016, trailing the global average, but a significant improvement over the 2006-2011 pace. The market will be supported by a rebound in economic conditions in the region as well as by continued growth in penetration for security equipment in Mexico, and to a lesser degree in the US and Canada. Gains in Western Europe and Japan will be more modest. While these markets will also experience growth resulting from improving economic conditions and concerns about crime, the relative maturity of most security equipment markets in developed areas will constrain future increases.

Electronic security products to remain fastest growing
Electronic security products accounted for nearly 65 percent of total security equipment demand in 2011. These products are also expected to post much stronger sales advances than mechanical security equipment through 2016. Demand will be driven by the ongoing improvements in design that give electronic systems greater functionality, while also making them increasingly user-friendly and cost-effective. Not only will these improvements help boost market penetration, they will also spur a strong replacement and upgrade market.

Demand for locks and other mechanical security products will post solid gains of more than six percent annually through 2016, bolstered by improving economic climates in developing parts of the world where markets are not yet mature.

Commercial & industrial market to remain dominant
The commercial and industrial security equipment market accounted for nearly 65 percent of sales in 2011. The dominance of this market reflects the large number of facilities, potential for loss, and availability of resources for protective purposes. Market gains will be fueled by rising business and nonresidential construction activity. In addition, the moderating costs of many advanced electronic security products will enable more businesses to afford these devices. However, the strongest growth will be recorded in the residential market, stimulated by a high perceived risk of crime among residents in many areas and by the increasingly affordable nature of security equipment.

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