Firms have begun to replace guards with electronic security systems to avoid labor costs
Los Angeles, CA (PRWEB) September 23, 2013
The Security Alarm Services industry offers the installation, maintenance and monitoring of alarm, fire and surveillance equipment. “While the industry benefited from an overall trend toward alarm and surveillance systems, the recession caused many clients to reduce security budgets,” according to IBISWorld Industry Analyst Andrew Krabeepetcharat. Falling construction activity and disposable income in the early part of the past five years to 2013 also dampened demand for new and ongoing security alarm systems. Consequently, IBISWorld estimates that revenue will decline at an annualized rate of 0.2% to $16.8 billion in the five years to 2013.
With tough operating conditions and slowing demand, many smaller companies that proved unprofitable during this time, were forced to shut down or were acquired by larger competitors. This pushed the number of industry firms down an average 0.4% per year to 8,949 in the five years to 2013. For example, major player Tyco International Ltd. acquired Broadview Security in 2010, further reducing the number of operations.
Despite these contractions, the industry has begun a slow turnaround in demand in recent years, with industry revenue expected to increase 0.2% in 2013, as the economy recovers and businesses start to invest in security again. Many companies have begun to replace guards and patrols with electronic security systems, which are often more cost-efficient since labor costs can be avoided. The availability of low-cost monitored security systems has also benefited the residential segment and helped increase the household penetration rate. “Consumer concerns about a potential rise in crime have fueled demand for these security systems,” says Krabeepetcharat.
In the next five years, small-business growth and increased disposable income levels will contribute to rising industry demand. Firms will also increasingly take advantage of new technologies such as biometrics, which involves face or fingerprint recognition, providing opportunities for expansion. Profitability is also projected to improve as operators take advantage of the cost savings and restructuring implemented following the recession.
For more information, visit IBISWorld’s Security Alarm Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Security Alarm Services industry comprises establishments that sell security systems, such as burglar and fire alarms and locking devices. They also offer installation, repair and monitoring services of electronic security alarm systems. The industry includes locksmiths but the locksmith segment is not a primary focus of this report because it generates a relatively small portion of revenue.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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