Revenues for private contractual security services in the US will increase nearly five percent annually to $63 billion in 2014. Growth will be fueled by a cyclical recovery in construction and business expansion from a depressed 2009 base. Technological innovations will also boost spending as improved reliability and user-friendliness encourage investment in alarm services and systems integration. Also, some businesses, institutions and agencies will continue to shift toward outsourcing security services. These and other trends, including market share and product segmentation, are presented in Security Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Guarding is the largest security service segment, accounting for 40 percent of total industry revenue and 67 percent of employment in 2009. Although this segment is relatively mature, demand will be supported by increasing specialization and outsourcing. The second largest service segment is alarm monitoring, which accounted for 30 percent of total industry revenue and ten percent of employment in 2009. Through 2014, above-average demand for alarm monitoring will be fueled by a recovery in residential construction.
The fastest-growing service segment will be pre-employment screening, which will advance nearly ten percent annually from a low 2009 base. Between 2009 and 2014, a net employment gain of 11.2 million is forecast for the US, compared with only 0.5 million between 2004 and 2009. As the economy recovers, there will also be increased job turnover. Employers will turn increasingly to outside screening service providers, because hiring-related liability concerns have increased and the technology and regulations surrounding pre-employment screening have grown more complex.
Other fast-growing service segments include systems integration and security consulting. These services will benefit from rapid advances in electronic technology, which will encourage investment in new security and building technology systems, which will in turn require experienced service providers to maximize benefits and avoid potential security breaches. Revenues in these security segments were especially low in 2009, as businesses deferred non-essential spending.
The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.