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Global security service revenues are forecast to increase 4.4% per year to $295 billion in 2026, with most growth occurring in the first half of the forecast period due to strengthening economic environments as the impact of the COVID-19 pandemic fades. Though the most significant recovery from the pandemic-driven downturn already occurred in 2021, long-term growth prospects for the industry are quite healthy, as companies work to respond to an evolving social environment and provide increasingly complex technology-aided solutions.
VIDEO Security Services Adapting to Uncertainty About Future Impact of Pandemic-Era Social Trends
While the overall effect of the COVID-19 pandemic on the global security services industry was negative, the impact on a segment-by-segment basis was complex and varied:
Spending on security guards was boosted in many countries by the need to enforce public health regulations.
Falling occupancy rates in commercial real estate shrank the market base, but reduced in-person presence at many facilities also created security risks that required solutions.
Concern about property crime – which is an important driver of security spending – broadly increased and was exacerbated by widespread rioting.
Many pandemic-driven restrictions have eased in the first half of 2022, and much of the world is transitioning public health policy to a more sustainable, non-emergency mode. However, some pandemic-era trends – such as the increased presence of security guards at facilities like grocery stores and more people doing remote work – have persisted, and the long-term effects on the security service market are complex. For example, more remote work increases building vacancy and the need for surveillance but could reduce the amount of space to monitor in the long term if companies abandon dedicated physical locations.
Systems Integration Continues to Drive Growth
Systems integration will continue to be the fastest growing segment of the global security services industry. Growth is being driven by the increasing prevalence of smart technology devices and building automation systems, which are providing systems integrators with opportunities in both commercial and residential markets.
The growth of systems integration is a major driver of acquisition activity, as the specialized technological skills required to serve this market are often outside the competencies of traditional security service providers. As this trend continues, the conventional distinction between physical security and cybersecurity is becoming increasingly blurred, and security service providers are increasingly being called on to develop new technological capabilities.
Market Consolidation Increasing in Wake of Pandemic
The market disruptions associated with the COVID-19 pandemic contributed to a high level of acquisitions in 2020 and 2021, as firms responded to the challenging environment by acquiring struggling competitors. Companies are facing a tight competitive environment, where acquisitions represent an important way to grow both market share and service competencies. Firms that wish to expand are thus required to closely monitor the status of smaller businesses to take advantage of acquisition opportunities ahead of competitors.
Security demand varies over time, and often extensively, across markets and is influenced by factors like the:
real and perceived exposure to potential loss
level of expected losses
nature of activities
use of alternative security products and services
size of the organization and its available resources
Historically, the security industry has been perceived as resistant to recessions and thus relatively stable. Recessions are typically associated with increased risk of crime, and – perhaps just as important – perceptions of greater crime risk, even when not actually reflected in official crime data. As a result, those who can afford it will often step up security spending during times of economic instability.
However, security service spending is still impacted by broader economic and demographic trends, including:
capacity for discretionary spending among both consumers and commercial entities
building construction activity, which impacts the stock of buildings that may require security
changes in urbanization and population density
Global security service revenues declined in 2020 but increased relative to GDP, in line with conventional wisdom on industry performance during recessions. Market performance was aided by the need for greater security presence to enforce health regulations in public and commercial spaces.
Revenue by Region
Security service revenues worldwide are expected to increase 4.4% per year to $295 billion in 2026. The Asia/Pacific region will account for the largest share of gains, boosted by:
rising industrialization and urbanization in developing countries throughout the region
high population density in many large cities, which contributes to concerns about crime
expansion of the Chinese private security industry, which remains below its potential size due to the fact that regulations did not allow for private providers until relatively recently
Growth in lower income countries – in the Asia/Pacific region and elsewhere – will be further boosted by:
increasing reliance on private security services over other alternatives, such as in-house security staffs and inexpensive security products like locks and fences
the general perception of security measures as a status symbol, resulting in high levels of investment among the growing number of affluent end users in these countries
very high levels of income inequality in many countries
Revenue growth in North America and Western Europe will be somewhat weaker, although these regions will continue to account for a large share of the global market. Growth in these regions will be limited by:
high labor costs, which limit the affordability of manned guarding services
high penetration of digital payment methods, which constrains the need for cash-related security services
However, strong penetration of complex technological security systems will offer some growth potential in high-income countries.