Private Security Services Market Projected to Expand

Apr 1, 2006 12:00 PM

           

U.S. demand for private contracted security services is expected to increase 4.3 percent per year to $48.3 billion in 2010, according to a report from The Freedonia Group.

Despite falling crime rates through 2004, many consumers remain concerned about violent and property crimes. Given terrorism, the public's perception of the high risk of crime and a belief that public safety officials are overburdened, opportunities will no doubt continue to present themselves for private security firms.

Gains will also be fueled by an upward trend in the privatization of public safety operations such as guarding and correctional management. Additionally, the outsourcing of in-house security functions will continue to be a factor, although less so as this trend matures.

As the market penetration of traditional security services has increased, vendors have sought to promote value-added services and features. For instance, some firms in the guarding segment, the largest segment of the security services market in 2005, emphasize the amount of training their guards have completed as a way to differentiate themselves from low-price vendors.

Advances in the alarm monitoring segment, the second largest in 2005, will be driven by specialty offerings such as monitoring of personal emergency response services and CCTV systems; and shifts in telematics-based vehicular alarms.

The security consulting segment is expected to post the strongest annual gains through 2010. This segment, along with the systems integration segment, will benefit from the use of more automated electronic security systems, including access control and surveillance equipment. Above average growth is also expected for the armored transport, correctional facilities management and private investigations segments.

In 2005, the nonresidential market accounted for nearly three-quarters of all private security services demand. Growth in the nonresidential market will also outpace the residential market through 2010, driven in part by the ongoing trend of the government market's outsourcing of services such as guarding and correctional facility management.

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