Downturn realises modest growth in UK surveillance market

01 Sep 09

IMS Research's latest report, entitled: 'The World Market for CCTV and Video Surveillance Equipment 2009', forecasts that the world market for video surveillance equipment will grow by just 3% in 2009.

By Brian Sims

Not surprisingly, the economic downturn has disrupted historical growth trends within the global video surveillance market. “In the last IMS Research market update released in February," explained analyst Gary Wong, "global video surveillance equipment revenues were expected to grow by 6% this year. However, a more sustained and deeper recession has led us to cut that forecast to 3%.”

More mature markets in Western Europe are forecast to be most affected by the economic downturn, with video surveillance equipment revenues expected to decline by nearly 7%. According to IMS Research, the large decrease in growth in countries such as the UK and Spain "reflects the dire state of their respective economies".

The video surveillance equipment market in the Americas is forecast to grow, albeit at a lower rate than in previous years. Despite being the nucleus of the economic downturn, the demand for video surveillance equipment in the Americas is expected to remain comparatively strong this year, buoyed by Government investment and the emerging trickle-down from financial stimuli.

Furthermore, investment in key verticals such as education and transportation is still strong. The installation of video surveillance is perceived to be a necessary expenditure in these markets. Likewise, the transition from analogue video surveillance to higher value network video surveillance in the Americas is driving growth. The Americas network video surveillance market is forecast to grow at over four times the rate of the network video surveillance market in the EMEA come the end of 2009.

New technologies re-shape the CCTV arena

The economies of Asian countries (excluding Japan and Singapore) have generally been less affected by the economic downturn and, as a result, investment in video surveillance equipment has remained strong. Indeed, IMS Research forecasts that Asia will be the fastest-growing regional market for video surveillance globally, primarily driven by the sustained demand for video surveillance in China.

If Japan is excluded from the Asian market, revenue growth this year in the region will likely exceed 13%.

Lower sales and new technologies are also re-shaping the competitive arena. Dominant players are finding their market share eroded by emerging players who can offer innovative technologies, better product support or even the same products at lower prices.

IMS Research forecasts significant variation in the market ecosystem over the next 18 months. The message is that vendors, distributors, installers, integrators and end users should prepare themselves for change.

In addition, IMS Research predicts that the global video surveillance market will begin to recover in the later stages of 2010. Improving economies, the transition to IP and emerging markets are all vital ingredients for the recovery.