SOURCE: Freedonia Group, Inc.

September 20, 2006 16:18 ET

World Security Equipment Demand to Reach $85 Billion in 2010

CLEVELAND, OH -- (MARKET WIRE) -- September 20, 2006 -- The global market for private security products and systems is forecast to advance 8.0 percent per annum through 2010, reaching $85 billion. While building construction -- especially in North America, China and Eastern Europe -- is expected to decelerate from an impressive 2000-2005 performance, a firming global economy and rising urbanization will continue to drive demand. Especially favorable prospects exist for digital closed-circuit television recorders, which are now outselling analog types in most countries; biometrics, which have finally entered the access control mainstream and will outsell traditional magnetic stripe cards by the middle of the next decade; and contraband detection devices designed for border, port and airport security. These and other trends are presented in "World Security Equipment," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The US will remain the largest single producer and consumer of security equipment, accounting for about one-fifth of total demand. While a cooling housing market will limit opportunities for locks and alarms, recovery in most commercial, industrial and institutional markets will fuel sales of higher-end electronic security devices. The Japanese market is also expected to pick up steam as building activity recovers from a decade-long downturn. In all, the developed world accounts for over two-thirds of total demand, with Western Europe alone representing one-third in 2005.

The fastest growth is anticipated in the world's developing regions -- Asia, Latin America, Eastern Europe, Africa and the Middle East. These areas feature largely unpenetrated private security markets and are characterized by rising crime rates, expanding economies, new business formation activity, heightened foreign investment, emerging middle and upper classes, and privatization of formerly state-owned industries like banking and air travel. As such, they will increasingly possess both the need for and the means to invest in supplemental security measures.

China in particular offers tremendous potential; while currently accounting for less than six percent of global demand, its market will surpass $10 billion by early in the next decade, among the fastest rates of growth in the world. Security equipment markets in Latin America and Eastern Europe will also grow at double-digit rates, while spending in the Middle East and North Africa will benefit from inflated petroleum prices.

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