The market for electronic security products and services has improved considerably since 2015, following several years of relatively poor performance. The upturn began in 2015 and accelerated in 2016, driven by technological advancements increasing replacement demand, along with the buoyant construction sector. Growth continues at a strong level in 2017 with 2018 also looking positive. The level of price competition has also stabilised in some sectors.
The UK electronic security market is mature, meaning that replacement demand is a key feature and accounts for the majority of end-user sales. Additionally, despite replacement demand being a key driver, strong growth in construction output since 2015 has seen new installations increase. Buoyant construction output in key end use sectors such as offices, industrial and more recently, entertainment and leisure, have supported new installations of CCTV and access control.
Technological developments have continued to drive the replacement market, particularly for CCTV. Chinese manufacturers have shifted their focus from low pricing to R&D which has been a key driver in terms of technological development. Key technological trends relate to image quality, artificial intelligence (AI), deep-learning analytics, cloud-based solutions, and integration with other security systems.
A variety of organisations is involved in the security industry. At the manufacturing level, these include manufacturers of electronic equipment, in addition to specialist manufacturers and IT developers. The specialist security equipment manufacturers range from large organisations providing a full service package, including all security equipment, installation, servicing and monitoring, to companies focusing on product development, such as those in the camera, biometric or IT sector.
The prospects for the electronic security sector overall are reasonably good in the short to medium term. Value growth is likely to come from increasing adoption of new technologies in both the new and replacement sectors. While construction output growth is expected to ease over the next 2-3 years, output remains relatively high by historical standards and this should continue to provide opportunities for manufacturers and installers of electronic security equipment.