Demand For Private Security Services In The Billions

Aug 12, 2008 2:54 PM

U.S. demand for private contracted security services is forecast to advance 4.7 percent per year to $65.9 billion in 2012. Growth will be spurred by a high-perceived risk of crime (from conventional violent and property crimes to white collar crimes and terrorism) and a belief that public safety officials are overburdened. Gains will also be fueled by an ongoing trend in the privatization of some public safety operations such as guarding government facilities and managing correctional facilities. Continuing changes in regulations regarding background searches and training requirements, and changes in security technology make the use of a contracted security services company more effective and less expensive than developing or maintaining an in-house security department.

Security services that capitalize on the continuing technology developments and interest in creative problem solving hold particularly good prospects. For instance, security consulting revenue is expected to achieve the best growth through 2012. Pre-employment screening, systems integration and guarding services are also expected to register above average gains through 2012. The trend toward more sophisticated and automated security electronics, including access controls and surveillance equipment, that are increasingly integrated with other building operations, will boost growth for security consultants and systems integrators. Demand for guarding service providers will advance as they continue to promote more value-added services and features.

Security service requirements vary across the major markets, influenced by factors such as exposure to potential loss, the nature of the customers' activities and the availability of alternative security options. In 2007, the nonresidential market accounted for three-quarters of all private security services demand. In addition, growth in the nonresidential market will outpace the residential market through 2012, stimulated by strength in security spending in schools, health care facilities, retail outlets, government buildings and public venues.

The size of the geographic market for private security services is closely linked to an area's population size and density, level of urbanization, real local crime rates, perceived crime rates and economic growth. For instance, in 2007 the Pacific subregion, which features several large urban centers, was the largest geographic market for private security services, while the more rural East South Central subregion was the smallest.

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© 2008 Penton Media Inc.

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