US Demand for Security Services to Exceed $64 Billion in 2016

US demand for private contracted security services is projected to increase 5.4 percent annually to $64.5 billion in 2016.  The market will be supported by an improving economy, as spending on private security was curtailed to a degree during the recession.  Gains will also be aided by changes in regulations as well as technological innovations that will encourage investment in alarm monitoring, security consulting, and systems integration services.  These and other trends, including market share and product segmentation, are presented in Private Security Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.  

Through 2016, the fastest growth is projected in security consulting, followed closely by systems integration and management.  Advances in both segments will be supported by the economic rebound, particularly the growth in construction and fixed investment activity.  These economic factors will spur the installation of new electronic security systems, benefiting both consultants, who help to design complex systems, and systems integrators, who assemble components from various equipment providers into a complete system.  Alarm monitoring and correctional facility management will also see above average gains through 2016.  Alarm monitoring demand will be driven by the recovery in construction activity, because new contracts are most commonly purchased following new construction or a significant renovation.  In addition, the aging of the population will support strong growth in the personal emergency response service segment.  Revenues for the private management of correctional facilities will be driven by the need to reduce overcrowding in public prisons, exacerbated by budgetary concerns that preclude building new public facilities.

Security service requirements vary across the major markets, influenced by factors such as exposure to potential loss, the nature of the customers’ activities, and the availability of alternative security options.  In 2011, the nonresidential market accounted for approximately three-quarters of all private security service demand.  However, through 2016 the residential market is expected to grow faster, benefiting from a recovery in housing construction and personal spending. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.