World Security Services

World demand to rise 7.4% annually through 2016
The global market for private contract security services will increase 7.4 percent annually through 2016 to $244 billion. In general, demand for security services is driven by rising urbanization, the real and perceived risks of crime and terrorism, belief that public safety measures are insufficient, and growth of a middle class with assets to protect and the means to pay for supplementary security measures. Going forward, the security service market will also be supported by an improved economic environment and building construction activity, notably in developed nations that saw significant slowdowns late in the 2006-2011 period.

Developing areas to post strongest market gains
The strongest market gains will be posted in developing parts of Asia, Eastern Europe, Africa and the Middle East where security markets are relatively underdeveloped. In fact, several national markets, including China, India, Mexico, Russia, and South Africa, are expected to achieve double-digit annual growth through 2016.

In many of these areas, the intensity of security service use (measured against indicators such as GDP and urban population) is relatively low, indicating significant growth potential going forward. Factors such as rapid gains in economic activity, rising personal incomes, foreign investment activity, and the increasing belief that public safety forces are overburdened, corrupt or unable to provide sufficient protection will boost gains. Furthermore, increasing regulation and a trend toward greater professionalism in many of these local security service markets will improve public trust in security service businesses, thereby driving market gains.

US to remain largest national consumer
The US will remain the largest single consumer of private contract security services, accounting for 26 percent of total world demand in 2016. While the US is a relatively mature market for security services, the sheer size of the US means that it will account for more than one-fifth of total global increases between 2011 and 2016, even with a below average growth rate. However, that level will be matched by the combined gains of a few rising markets. For instance, India and China will together account for 13 percent of worldwide gains and Brazil, the world’s second largest single market in 2011, will represent another seven percent of global growth.

Contract guarding to remain largest, alarm monitoring to grow fastest
Contract guarding will continue to be the largest segment of the market, accounting for more than half of total revenues in 2016. This segment benefits from the minimal capital requirements for operation which, along with relatively low labor costs, make it the dominant security service in the developing markets. The alarm monitoring market is expected to see the strongest growth, spurred by rising interest in alarm systems coupled with the improved outlook for building construction.

PRESS RELEASE

Global Demand for Private Contract Security Services to Reach $244 Billion in 2016

Global demand for private contract security services will increase 7.4 percent annually to $244 billion in 2016. In general, demand for security services is driven by rising urbanization, the real and perceived risks of crime and terrorism, belief that public safety measures are insufficient, and growth of a middle class with assets to protect and the means to pay for supplementary security measures. The security service market will also be supported by an improved economic environment and building construction activity, notably in developed nations, which saw slowdowns late in the 2006-2011 period. Contract guarding will continue to be the largest type of security service, accounting for more than half of total revenues in 2016. The commercial and industrial security service market is by far the largest, reflecting the large number of facilities, potential for loss, and availability of resources for protective purposes. The considerably smaller residential market will post the strongest gains through 2016, driven by rebounds in residential construction in several countries and a high perceived risk of crime among residents in many areas. These and other trends are presented in World Security Services, a new study from The Freedonia Group, Inc., a Clevelandbased industry market research firm.

The strongest gains will be posted in developing parts of Asia, Eastern Europe, Africa, and the Middle East, where security markets are relatively underdeveloped. In fact, several national markets, including China, India, Mexico, Russia, and South Africa, are expected to achieve double-digit annual growth through 2016. In many of these areas, the intensity of security service use (measured against indicators such as GDP and urban population) is relatively low, indicating significant growth potential going forward.

The US will remain the largest national consumer of private contract security services, accounting for 26 percent of total world demand in 2016. Despite its maturity, the dominant size of the US market means that it will account for more than one-fifth of total global increases between 2011 and 2016, even with a below average growth rate. Brazil, the world’s second largest national market in 2011, will post above average increases and represent another seven percent of global growth through 2016. Two smaller developing national markets for security services, India and China, will together account for an additional 13 percent of world gains through 2016.