Investment in video surveillance still strong despite financial uncertainty
The news that Dubai World is in financial difficulty may have rocked confidence in the Emirate but as far as the surveillance market is concerned – prospects for 2010 are still looking good. According the latest market research from IMS, demand for video surveillance equipment in the Middle East is expected to significantly outperform global video surveillance market growth in 2010.
IMS Research estimates that the Middle East market for video surveillance was worth more than US$150 million in 2008. However, there are significant growth opportunities available due to the substantial number of greenfield projects coming on stream in the region. Turkey, Saudi Arabia, Iran and the UAE, says the report, are forecast to be key growth countries over the next few years.
As with the other regions in the world, tightening credit conditions are responsible for some project delays. However, video surveillance project delays in the Middle East can also be attributed to the severe decrease in construction material prices. Report author and IMS Research analyst Gary Wong says, "The prices for construction materials have fallen dramatically over the last 12 months and this has resulted in many greenfield projects being re-tendered. This re-tendering process has resulted in delays in the construction process and extended the expected implementation timeframes for many security projects. As a result, many planned security projects will come on stream later than anticipated."
Wong adds: "Broadly speaking, in the Middle East there is still strong investment in video surveillance. Vertical markets that are continuing to grow strongly are typically backed by government investment. However, government spending on security infrastructure is inextricably linked to the price of oil and this represents a significant factor affecting growth of video surveillance in the Middle East."
The annual fiscal budgets of many countries within the Middle East region are almost solely dependant on the global price of crude oil. In 2008, severe oil price volatility resulted in a number of Middle Eastern countries delaying long-term development plans, with this action causing a knock-on effect on the video surveillance industry. Within the last 12 months the price of oil has stabilised and the combination of global economic recovery and the planned reduction in oil output, instigated by OPEC, should ensure that government spending on video surveillance security in the region continues to grow strongly in the short term. IMS Research forecasts that the network video surveillance market in the Middle East will exceed 15% revenue growth in 2010.
The Middle East Market for CCTV and Video Surveillance – 2009 edition is available from www.imsresearch.com (opens a new window)
