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BSRIA Worldwide Market Intelligence [email@example.com] - July 2009
World building controls service and maintenance
market remains strong through 2009
A new report by BSRIA Proplan on the world market for building controls shows that, like the majority of markets worldwide, the economic crisis has hampered growth in many of the countries in the global building controls market. Between 2006-2008 the consolidated world market witnessed healthy growth levels of around 7.4 per cent, however, as a result of the depressed economic climate, the market is now expected to drop to below zero per cent. Nevertheless, the total Intelligent Building Controls - Environmental (IBC(e)) business managed to reach an impressive US$ 18 billion in 2008. The IBC(e) service & maintenance market remained buoyant through this turbulent time with expected growth of 1.4 per cent during 2009-2010; unfortunately this has not been reflected in the remaining markets where growth has declined considerably.
One bright spot is in Saudi Arabia, where the government plays an important role in its economy and continues to encourage private sector investment, such as in the electricity generation and transmission network. As a result, the Saudi Arabian economy is expected to continue its steady growth, which has had a knock-on effect on the building controls market. Between 2006-2008 the market grew by over 30 per cent, with further investments and building projects in the pipeline. BSRIA's report expects the market to grow by just over six per cent (CAGR) in 2009-2010. The product and service markets are expected to experience the largest growth over the period of 2009-2010 with 6.8 per cent and 8.3 per cent respectively. Drivers behind this healthy growth include growth in new construction, including various new projects already in the pipeline and significant spending on education and universities.
Total manufacturer's turnover reached just over US$ 14 billion worldwide in 2008; America accounted for the largest share with 39 per cent of the global market, closely followed by Europe which enjoyed 37 per cent of the total manufacturer's turnover. So North America remains the biggest market in the world, with the United States accounting for around 90 per cent of the total sales and Canada taking the balance of 10 per cent.
In 2008 the global installed systems market reached an impressive value of US$ 12 billion. Once again, America is the largest market in this category with 40 per cent and Europe accounting for 37 per cent, while Asia and the Middle East collectively account for 23 per cent. Third parties enjoy around 45 per cent of the total installed systems sales market share. The top 3 players, Johnson Controls, Siemens and Honeywell account for 37 per cent of the installed market.
In spite of its good performance between 2006-2008 where double digit compound growth was recorded, Latin America still represents less than five per cent of the total American IBC(e) market. Nevertheless, sales in smaller countries such as Peru have been growing rapidly in recent years.
Energy legislation is having a big impact in key building controls markets in Europe such as the UK, Germany and France where the Energy Performance of Buildings Directive (EPBD) is in place. The new energy legislation is an important driver behind the growth of these markets, as it demands that buildings must be energy saving and energy efficient. In the UK, the EPBD has resulted in the revision of Part L of the building regulations and is expected to fuel the demand for controls; for example, zone control is required in order to pass the carbon emission target in new buildings.
Controllers account for the largest share of the building controls product market with sales of approximately US$ 2.8 billion in 2008. Europe dominates the controllers market with close to half the global share. Sales of controllers in Germany were amongst the highest in Europe totalling an impressive US$ 405.2 million. Actuators also performed well in 2008 with sales of US$ 946 million and follow a similar pattern to the controllers market, where Europe is the market leader, followed by the Americas region.
Installation of IBC(e) products and systems vary from region to region; offices and industrial buildings are dominant in Europe and collectively hold 43 per cent of the European market. A different scenario is evident in the Americas where recent demand has been driven strongly by education and other public buildings. The Middle East market has been driven by demand for IBC(e) products in offices and commercial (retail) buildings, whilst in Asia offices and industrial have been the main segments for installation.
Finally, BSRIA's report shows that Qatar, Scandinavia and Germany spend the most per capita on IBC(e), implying that they are amongst the most mature markets in the world. These markets spend more money than most on comprehensive and sophisticated solutions to meet the demands and challenges of twenty first century building control problems.
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