Freedonia Market Research Analyzes Global Security Services Revenues

The global market for private contract security services is forecast to advance 7.5 percent per annum through 2012 to almost $200 billion.  Gains will be driven by a generally healthy global economy, rising urbanization, and heightened fears of domestic crime and terrorism in many countries.  An upswing in building construction is also expected in several major economies, most notably the US, Japan and Germany, although most other areas will see construction growth slow after a strong 2002-2007 performance. These and other trends, including market share and company profiles, are presented in World Security Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Contract guarding will remain the largest segment of the market, accounting for over 48 percent of total revenues.  Especially favorable prospects exist for services such as systems integration and consulting, which benefit from the transition from manned to electronic security modalities.  By contrast, the private prison management industry has suffered a dramatic reversal of fortunes since the late 1990s, as rising opposition to the privatization of correctional facilities has taken it from the fastest to one of the slowest growing security service segments.  Indeed, prison management contracts with private firms have been revoked in countries from Canada to New Zealand, with the state resuming control.  In 2007, the US was the overwhelmingly largest national private prison management market in the world, accounting for 87 percent of total global revenues.

The strongest gains will be registered in developing parts of Asia, Eastern Europe, Africa and the Middle East, and Latin America.  Security markets in these areas are, for the most part, underdeveloped, and demand will be fueled by generally strong economic environments, new business formation and foreign investment activity, increased urbanization (contributing to social tensions and criminal activity), and growing middle and upper class populations.  As a result, these developing regions will increasingly have both the need for and means to invest in security services.  The BRIC countries of China, India, Russia and Brazil are forecast to record some of the most robust sales increases. The US will remain the largest single consumer of private contract security services, accounting for one-third of total world demand.  Advances will trail the global average by a wide margin as alarm monitoring and prison management markets continue to mature, although a rebound in building construction will provide some support.  

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.