2020 has seen a sharp contraction in the electronic security market size, though the focus on replacement sales has to some extent sheltered the market from the even steeper fall in new construction output. COVID-19 has even created a surge of interest in pandemic-related products such as thermal imaging to measure body temperature and analytics to monitor occupancy levels.
Manufacturers have responded to the COVID-19 pandemic by launching or promoting products designed to provide appropriate security measures, such as AI software to monitor numbers of people entering or occupying a building and to ensure social distancing, thermal imaging cameras to provide a temperature screening solution, or touchless access control.
The electronic security market grew strongly from 2016 to 2019, particularly in services, CCTV and access control. It has been boosted by a healthy construction sector though construction output growth slowed in 2018 and 2019 compared with the previous three years as political and economic uncertainties associated with Brexit held back the UK economy and affected business confidence and consumer spending. In particular, the key end use sectors of offices and retail saw a decline in new build output in 2018 and 2019.
Fiona Watts, Editor at AMA Research, comments on the market “growth has been driven by technological advancements increasing replacement demand, as well as a largely buoyant construction sector, despite a slowdown in construction output in the key end-user sectors of offices and retail in the past two years. However, the level of growth has been constrained to some degree by the intensity of price competition triggered by the market entry and increasing dominance of Chinese manufacturers.”
Due to its essential nature, security equipment markets have historically been able to weather recessions somewhat better than most other industry sectors, and the economic downturn caused by the COVID-19 pandemic is likely to be no exception. In addition, the rapid pace of technological development will fuel growth of the replacement market.
Looking ahead, recovery in the security market and in the wider economy will be gradual, only gathering significant pace from 2022 onwards. Though the interest in pandemic-specific solutions will wane, increasing adoption of advanced technologies will continue to drive growth in replacement sales, particularly in CCTV and access control.