Memoori's latest report is the company's 12th annual detailed analysis, and considers together all the factors that influence the industry’s future, by assessing the structure and size of the combined physical security business from 2020 to 2025. This information is then broken down by size of product, sales by major sector and geographic region and forecast sales are estimated to 2025.

Covid-19 impact

Above all, the report predicts that the Covid-19 outbreak will force suppliers to radically rethink how they operate their businesses, in particular resilience to externalities. In parallel, there will be lessons to learn on having a more coordinated and resilient supply chain. In the opinion of the researchers, the video surveillance business is too dependent on Chinese OEM’s and component manufacturers. With many of these factories closed for the first two months of 2020, it caused temporary supply chain issues.

Additionally, the pandemic has created demand for new solutions to help control the spread of the virus, and, positively, physical security products have risen to the challenge, helping to implement social distancing protocols through existing access and video systems with AI-powered analytics. Thermal cameras have also been deployed to measure people’s temperature, with demand being strong. However their usefulness has been questioned, with the World Health Organisation saying that on its own temperature screening “may not be very effective”.

Pandemic brings 11 years of growth to a halt

In the report, Memoori estimates that the total value of world production of physical security products at factory gate prices in 2020 will be $31.7Bn, a decline of over 7.5% on 2019. Sales declined over the first 3 quarters of 2020 as a result of Covid-19, bringing to a halt, the previous 11 consecutive years of continual growth.

Earlier in 2020, Memoori produced two different scenarios, the analysts believe that their scenario 2 now looks the most feasible, where global markets take around a year to return to some normality and mass global adoption of a vaccine is achieved within 18 months. The analysts believe this has a probability of 65%.  The market is expected to recover by Q3 2021 and by the end of that year it will have grown by nearly 3%, however different rates of growth apply in each of the 3 businesses and geographic territories. The global forecast they suggest the market will reach, is estimated at over $42Bn by the end of 2025 at a CAGR of 6% over the next 5 years.

Tensions between US & China

China continues to increase its share of the physical security product market. The Chinese market has grown rapidly through a boom in new construction and "Sharp Eyes" surveillance projects driven by the public sector. However very little of this vast expanding market is accessible to overseas manufacturers, nor is it likely to be in the foreseeable future, with ongoing political and trade tensions between the US and China.