The global market for private contract security services is forecast to advance 7.5 percent per annum through 2012 to almost US$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 U.S., Japan and Germany, although most other areas will see construction growth slow after a strong 2002-2007 performance.  These and other trends are presented in World Security Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm in the U.S.A.

CONTRACT GUARDING

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  Indeed, prison management contracts with private firms have been revoked in countries from Canada to New Zealand, with the state resuming control.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 U.S. was the overwhelmingly largest national private prison management market in the world, accounting for 87 percent of total global revenues.

BEST REGIONAL GROWTH

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 U.S. 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.

MARKET DOMINANCE

The commercial and industrial security service market is by far the largest.  The dominance of this market reflects its size, potential for loss and availability of significant resources for protective purposes.

Future advances will be spurred by rising business activity and associated security requirements as the world economy continues to grow.  Although the government/institutional and residential security markets are considerably smaller, they will register healthy increases through 2012.  Government/institutional market gains will be fueled by the heightened level of security consciousness that exists in the post 9/11 era, with government agencies playing a lead role in providing for the security of the public at large.

However, the strongest growth will be posted by the residential security market, stimulated by a high perceived risk of crime among residents in many areas.