Report claims downturn in alarm sales driving market decline

MBD estimates that the actual market for security alarms and systems was £1092.6 million during 2005, equivalent to a two per cent decline in the year and a decline of three per cent compared with 2002. In more bad news, the intruder alarm sector is forecast to decline by 12 per cent in real terms over the five years up to 2010.

"Intruder alarms are believed to represent one of the more mature sectors of the security alarms and systems market," the report says. "An element of the lack of growth in this sector reflects increased competition from other areas of the security equipment sector, and an element from the intense price competition that continues to prevail within the sector. For 2010, the value of this sector is projected at £642m at 2005 prices."

The report has better news for the CCTV and access control sectors, however. The report predicts continued real term growth for the CCTV sector, but growth rates are expected to be more moderate than in recent years, due to price competition and penetration levels increasing.

"The strongest growth potential in this market is expected to exist in digital and IP enabled systems," the report says. "Overall, the UK market for CCTV is forecast to increase by five per cent in real terms between 2005 and 2010."

MBD expects income in the access control sector to increase year-on-year up to 2010, making it one of the strongest growth sectors in the security market.

"Overall, demand for access control systems is anticipated to increase by 12 per cent in real terms between 2005 and 2010. New technologies and higher value installations are expected to drive market development in this sector," the report says.

"The integrated systems sector is also expected to increase throughout the five year forecast period, with growth exceeding that of the overall market development. In 2010, the market is anticipated to reach £270m at 2005 prices, equivalent to overall growth of seven per cent in real terms."

The overall market, including sales and rental income, is anticipated to increase in each year, except for a marginal decline projected for 2007.

'The UK Security Equipment Market Development Report' is available from MBD for £550. Contact Tracey Wallbank on 0161 236 6845 or email traceywallbank@mbdltd.co.uk.

• A report by Plimsoll Publishing warns that up to 71 of the top 460 UK burglar and intruder alarm systems companies are at a high risk of financial collapse. Senior analyst David Pattison said: "At these high risk companies, the managers need to act quickly to get their firms back on a decent financial footing. It seems inevitable that we will see a period of consolidation. Job losses and cost cutting are essential if these companies are to survive." Copies of the report are available by calling 01642 626 400 or emailing m.aston@plimsoll.co.uk.