Economic conditions are impacting security alarm spending
Report: Economic conditions are impacting security alarm spending
June 11, 2012
The ongoing economic recession has forced decision-makers to be more frugal spenders in terms of security.
According to a report by market research firm IBISWorld, the security alarm services industry is forecast to generate roughly $16.7 billion in revenue in 2012. Despite the lingering effects of the recession, analysts believe industry revenue will increase by 1.6 percent this year as business decision-makers feel the need to implement new technologies aimed at deterring intruders.
"While the industry has benefited from an overall trend toward alarm and surveillance systems, the recession caused many clients to reduce security budgets," IBISWorld industry analyst Kevin Culbert said.
The market for labor-intensive monitored alarm systems that require security guards and patrols has been one of the areas that received less spending over the past several years, the report noted. This is largely because innovations in the field have given companies the opportunity to leverage cost-effective automated systems that eliminate the need for the human eye.
Analysts believe that organizations will invest in new technologies like biometrics over the next five years to enhance the efficiency and reliability of security alarm systems. This is primarily because facial recognition, retinal scans, and other biometric-based solutions cannot be hoodwinked, as physical human characteristics are virtually impossible to replicate.
According to a report by Ernst & Young, biometrics-based services have been gaining momentum over the past several years and have recently become a feasible approach to risk management and security. This is especially true for access control systems that require identity confirmation for entry.
By implementing next-generation biometric security alarm systems, businesses can more effectively prevent fraud and theft from occurring in the workplace.
IBISWorld analysts also noted that an increase in government fire and security codes throughout the United States has required companies and homeowners to boost investments in fire alarm systems and surveillance technologies. Meanwhile, the growing premiums for insurance policies and the ongoing fear of criminal activity have driven investments in the consumer security market.
"The availability of low-cost monitored security systems for the residential market has also increased the household penetration rate," Culbert said. "Still, the residential market is sensitive to changes in economic activity, and the recent fall in disposable income dampened demand for new and ongoing services."
While some decision-makers are conservative in their investments because of the economy, the long-term benefits associated with efficient security alarm systems may cause some individuals to reconsider deploying solutions, regardless of the economic outlook.