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| KN74119 |
| KEY NOTE SECURITY (UK) : JULY 1999 |
| Overview |
ISBN 1-85765-769-1
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The UK security and fire protection market showed a combined value of £4.6bn in 1997, at end-user prices, and is expected to have risen to £4.73bn in 1998. Total growth over a 4-year period is estimated at 17.5 percent at constant prices.
The report considers the market under the sectors of manned security
services, electronic security, physical security equipment, vehicle security
and fire protection equipment but there are several subsectors within these
headings.
The manned security sector is the largest in value, estimated at
£1.87bn for 1998, and it shows annual increases in value as the cost of
manpower increases. There has also been some real volume growth, due mainly to
a trend towards contracting out more services and the privatisation of
functions which were once the preserve of public sector employees. The cash
handling subsector has suffered a decline in volume in recent years but the
recent price cutting has come to an end and the value of this sector appears to
have recovered.
Electronic security is estimated at £1.37bn. This is
the most dynamic sector in terms of product development, but different
subsectors show different levels of maturity. Prices have fallen for some
products and value growth has not kept pace with the very strong volume growth.
Income from maintenance and monitoring becomes more important as the electronic
sectors mature, and is estimated to account for more than a third of the
overall sector value. The main products included within electronic security are
intruder alarms, access control, closed-circuit television (CCTV) and personal
security systems. There is increasing overlap between these sectors as the
market moves towards greater use of integrated systems.
The physical
security sector, which includes locks, safes and many other devices such as
grilles, screens and security fences, is very mature and is estimated to be
worth £593m.
Vehicle security is worth around £261m. It has
shown very strong growth over the last 4 years, thanks to growth in motor
vehicle production and in UK registrations.
Fire protection, valued at
£635m, is a mature market sector but turnover figures show that there has
been some growth in recent years, due to price increases and the recent growth
in construction output. The ongoing costs of maintenance account for around
half the value of the sector.
|
Table 1: Annual Growth for the Main Sectors of the |
||||
|---|---|---|---|---|
|
1995 |
1996 |
1997 |
1998 |
|
|
Manned |
||||
|
Security services |
0.8 |
4.8 |
6.6 |
4.7 |
|
Electronic security |
9.0 |
3.9 |
4.4 |
0.3 |
|
Physical security |
-0.2 |
2.1 |
0.5 |
-0.3 |
|
Vehicle security |
18.8 |
9.3 |
4.3 |
6.5 |
|
Fire protection |
7.7 |
5.0 |
3.7 |
4.1 |
|
Total |
4.7 |
4.4 |
4.7 |
2.8 |
|
Source:Key Note |
Research carried out for Key Note by The Gallup Organization Ltd found
that 81 percent of adults now have at least one smoke detector in their homes,
while 78 percent have a mortise lock or deadlock on the front door and 77
percent have security locks on windows. Other types of basic security
protection still have some capacity for further growth and only 34 percent of
adults claim to have a fire extinguisher in the home.
Views on the factors
contributing to crime differ between the age groups. Young people are more
likely than their elders to blame unemployment, urban deprivation and envy of
others. Drugs are thought to be a factor by 92 percent of the population and
for every age group questioned this was the factor most likely to be
blamed.
Many hundreds of companies play a part in the security and fire
protection market, and the range of products and services is so diverse that no
single company or group is present in every subsector. At the top end of the
industry, concentration continues and the leading few groups have increased
their dominance. This is particularly true of the top two groups, Williams PLC
and Tyco International. A recent newcomer to the list of leading players is
Securitas, an important Swedish based group which entered the UK market in 1996
and has increased its presence in 1999 with a second acquisition.
The
sector which is expected to show most change over the next year or two is that
of manned guarding. The combined effects of the National Minimum Wage, the new
Working Time Directive and the expected introduction of compulsory licensing of
guards will push up manpower costs and lead to shortages of suitable employees.
Large-scale concentration is expected in this sector and it has already begun
in 1998/1999. Those companies which already pay above the National Minimum Wage
and which comply with existing standards will be the survivors, but they will
also feel the effect of rising costs.
The relatively stable economy and the further growth expected in output
of new commercial buildings seem likely to guarantee growth in the security and
fire protection markets to the end of the century. Fire protection is a fairly
stable market, backed by strict regulations and with a high level of income
from maintenance. The electronic security sectors have varying propects. Access
control has continued growth prospects, while for electronic article
surveillance (EAS) prospects are excellent. The CCTV market still has plenty of
opportunities but prices have fallen and the boom period is coming to an end.
The intruder alarm sector is fairly mature, although household penetration
could be increased. There is increasing demand for integration of electronic
security and fire protection systems. The industry agrees that price rises of
at least 10 percent will occur in the manned guarding sector but it is not
certain what proportion of the clientele will find alternatives to using
full-time security guards as a result of these price rises.
Overall, the
prospects for security and fire protection remain fairly good. The threat of
crime and the danger of fires are constantly present. There is a continual need
for product innovation to try to remain one step ahead of criminals and there
are many technological improvements which offer opportunities for upgrading of
security equipment.
Text © 1999 Key Note
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Last updated by Jacob van Eldik 24th January 2000