The Freedonia Group Forecasts US Electronic Security Products And Systems Demand To Advance 8.6% Annually Through The Year 2004

US sales of electronic security products and systems are forecast to advance 8.6 percent per annum through the year 2004 to $10 billion, far outpacing the security industry average.

However, the US trade deficit - concentrated in alarm and closed-circuit television (CCTV) components - will continue to rise as US-based manufacturers shift production offshore and firms in China and other emerging economies step up their participation in the electronic security market. As a result, US shipments will trail sales, growing 7.8 percent annually to $8.8 billion in 2004.

Markets offering above-average growth prospects include the transportation and trade sectors. The former will benefit from concerns regarding the vulnerability of the US air traffic system to terrorist attacks, and specifically from robust federal funding support for the development and deployment of advanced automated explosive detection systems. Gains in the retail trade sector will be concentrated in the CCTV and EAS segments. These systems have proven quite effective at limiting retail shrinkage and continue to exhibit rapid improvements in price/performance, supporting a thriving upgrade market. The proliferation of digital CCTV components and the advent of "smart" EAS/asset management systems will be especially important in this regard.

The access control segment will also log healthy gains, boosted by an upswing in industrial and institutional construction activity and the long awaited emergence of advanced biometric and smart card-based systems as cost effective alternatives.

Advances will be slower on the alarm side, restrained by a higher degree of market maturity and a weak new housing market. Nevertheless, alarms will remain the largest electronic security segment, with shipments exceeding $4 billion by 2004.

Geographically, the fastest growth is expected in the Mountain subregion, with above-average gains also anticipated in the much larger Southern region and Pacific subregion. These areas are exhibiting healthy secular growth in population, building and economic activity, and possess rather underdeveloped private security infrastructures relative to their crime levels. By contrast, relatively weak economic and construction outlooks, more mature security markets and crime rates below the national average will all limit potential gains in the Northeast.

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Electronic Security: Products & Systems (published 05/2000, 319 pages) is available for $3600 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. 

For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 646.0484 or e-mail pr@freedoniagroup.com. Full text is also available online through commercial database companies and the www.freedoniagroup.com Web site.