World demand to rise 6.6% annually through 2018
Worldwide demand for private contract security services will increase 6.6 percent per annum to $331 billion in 2018. 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, some of which saw slowdowns late in the 2008-2013 period.
Fastest growth to occur in underdeveloped markets
The fastest gains will be posted in parts of Asia, Eastern Europe, Africa, and the Middle East, where security markets are relatively underdeveloped. Several national markets, including China, India, and South Africa, are expected to achieve double-digit annual growth through 2018. 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.
US to remain largest market
The US will remain the largest national consumer of private contract security services, accounting for 27 percent of total world demand in 2018. 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 2013 and 2018, even with a below average growth rate. Brazil, the world’s second largest national market in 2013, will post above average increases and represent another eight percent of global growth through 2018. Two smaller developing national markets for security services, India and China, will together account for an additional 18 percent of world gains through 2018.
Contract guarding to grow most rapidly
Contract guarding will continue to be the largest type of security service, accounting for more than half of total revenues in 2018. This segment benefits from the minimal capital requirements for operation which, along with relatively low labor costs, make it the dominant security service in developing markets. Because this service is among the first established and licensed in many developing markets, it will also post the fastest gains through 2018, although alarm monitoring will also register rapid increases.
Residential market to lead gains from smaller base
The commercial and industrial security service market is by far the largest, accounting for more than 70 percent of total global demand. This dominance reflects the large number of facilities, potential for loss, and availability of resources for protective purposes in the commercial and industrial sectors. The considerably smaller residential market will post the fastest gains through 2018, driven by rebounds in residential construction in several countries and a high perceived risk of crime among residents in many areas. The growing middle class in many regions will also boost growth in the residential market by providing more people with assets to protect and the means to purchase various supplementary protection.