In 2008, the UK market for security guarding increased by an estimated 4% to GB pound 3.34 billion, consolidating growth of 5% recorded in the previous year.
The market has expanded in each year since 2004, with annual growth levels peaking at 9% in 2004.
Growth has mainly been driven by the expanding Cash-in-Transit and custodial services sectors, as well as by security companies increasingly offering more integrated security solutions.
The deteriorating economic conditions during 2008 are not believed to have had a significant impact on the market during the year. However, as the recession is now believed to be more severe and prolonged than previously anticipated, and with companies focusing on cost-cutting measures, these two factors alone are expected to have a stronger impact on guarding sector during the remainder of 2009.
Market forecast: 2009-2013
The value of the security guarding market is anticipated to increase by 1% in real terms this year. This is expected to be followed by slightly stronger annual growth levels of between 2% and 4% in the following four years.
In 2013, the value of the market is anticipated to reach GB pound 3.85 billion (at 2008 prices), equivalent to an overall growth of 15% in real terms compared with 2008.
Overall market development across the next five years is expected to be largely driven by the Cash-in-Transit and custodial services sectors. In contrast, the pure guarding sector is reaching a level of maturity, partly reflecting increased substitution by electronic security systems.
Growth in the market is also expected to be generated by the broadening and diversification of their service offerings among major providers, with an increasing number of larger companies offering fully-integrated, seamless security solutions and others diversifying to become fully-fledged facilities management companies.
Solutions providers are also expected to continue to benefit from the trend towards outsourcing of non-core activities.
Proportional importance of security guarding
The proportional importance of the security guarding sector to the total manned security market is expected to decline from 62% in 2008 to 58% come 2013.
The modest increase expected in 2009 is due to more companies using fewer officers, opting instead for more cost-effective electronic security solutions in a bid to reign in costs due to the more challenging trading conditions.
Intense price competition is also expected to remain a feature of the sector over the next few years.
From 2010 onwards, the value of the sector is anticipated to increase at a slightly stronger rate, although annual growth levels are not expected to exceed 3% in real terms.
Overall, the security guarding sector is forecast to expand by 8% in real terms between 2009 and 2013.
Cash-in-Transit: how will it progress?
The proportional importance of the Cash-in-Transit sector to the total manned security market is expected to increase from 26% in 2008 to 28% in 2013.
The value of the sector is forecast to increase by 23% in real terms during the same period, reaching GB pound 1.06 billion (at 2008 prices) in 2013. However, in the short-term the demand for Cash-in-Transit services may be negatively affected by the increased consolidation in the banking sector, and by the increased number of insolvencies in the retail sector due to the economic downturn.
That said, growth is expected to be maintained throughout the forecast period, reflecting the continued trend towards outsourcing in the sector.
Forecast for the custodial sector
The custodial services sector is expected to continue to show the strongest growth potential over the next five years, increasing by a projected 34% in real terms between 2008 and 2013.
The share of the sector is also anticipated to further increase from 12% in 2008 to 14% by 2013.
Anticipated growth is largely a reflection of the trend towards outsourcing in public sector prisons, along with the increasing prison population, and Government plans to build more Private Finance Initiative prisons.
Copies of the UK Manned Security Market Development Report are available from MBD, priced at GB pound 600. Write to MBD, Barnet House, 53 Fountain Street, Manchester M2 2AN, telephone 0161-233 7092 or log on at the web site (a link is provided on the right hand panel of this page) to order your copy.