Blake Kozak, principal analyst, Security and Building Technologies at IHS believes that there are several reasons for this growth trend.

Firstly, it is expected that end-user education will continue to expand. End-users are beginning to more fully understand and take risks with new technologies. Wireless locks are a prime example. Ten years ago, wireless locks were not considered as secure but are now a driving force for the entire access control industry. IHS also expects that that in North America, mechatronic locks for utilities and critical infrastructure currently have more opportunity compared with Latin America. When first released, biometrics were similar to video analytics because they could not deliver what was promised and expected. Now, biometrics are being adopted at a rapid pace. Access control as a service (ACaaS) is another trend which is helping to increase market growth across North America.

These trends are all helping to drive growth across North America, but Latin America has yet to see strong adoption of these trends for several reasons. First, the cost of labour remains low in many parts of Latin America. As a result, the ROI is a tougher sell since one of the primary benefits of wireless locks is the reduction in labour and equipment costs. As the cost of the wireless lock devices is much more expensive compared with magnetic locks or mechanical systems, the market has yet to hit critical mass.

Biometrics remain an expensive technology and is priced out of the budget of many end-users. This is changing though. IHS expects the cost to continue to decrease and the awareness to increase. With more governments relying on biometrics and mobile handset providers, such as Apple, using fingerprint sensors, end-users will start to realise the benefits and want to use the technology for other purposes, like access control. ACaaS remains a small portion of the Latin American market due to the cost of labour, integrator education and the reliability of broadband connections.

In terms of economic indicators, Latin America has also underperformed compared with North America. For construction, Latin America contracted 1.0% in 2014 and is projected to contract by 1.2% in 2015. Conversely, construction in North America was estimated to grow by 2.0% in 2014 and is projected to increase by 2.1% in 2015.

Overall, IHS expects that Latin America will remain a difficult market for the next 1-2 years depending on economic growth and how quickly suppliers can educate not only end-users but also channel partners. Mexico, Peru and Colombia are expected to perform well economically over the next several years and will present good opportunities for access control. While Brazil remains a tremendous growth opportunity due to its size and diversity, IHS expects that Brazil’s growth will not exceed 10% annually until 2019. Although the short term outlook is less positive for Latin America, IHS expects that Latin American growth for access control will nearly double the rate of North America starting in 2019.