by Brianna Crandall — April 8, 2016—With more than 40 percent of total fire-safety services outsourced to third-party testing companies, service providers are showing urgency in expanding their service portfolios, according to recent analysis from growth partnership company Frost & Sullivan. The thermal imaging camera (TIC) market, for instance, is rapidly developing into a one-stop shop for all fire-safety service requirements. Scalability and economies of scale will help augment the revenues of top TIC participants that deliver end-to-end services.
Frost & Sullivan’s Analysis of the Global Fire Safety Services Market finds that the market earned revenues of $15.70 billion in 2015 and estimates this to reach $23.20 billion in 2020. The study covers the fire-safety service segments of testing, inspection, certification, consulting and training. Developed economies are expected to dominate the demand over the forecast period, and fire-safety consulting services to generate the highest revenue.
Frost & Sullivan Measurement and Instrumentation Research Analyst Aravind Govindan points out:
Leading TIC companies are enhancing their brand value by developing a complete breadth of testing, inspection and certification services for material testing, condition monitoring, metrology and non-destructive testing. They are also leveraging their global presence and brand image to sign strategic merger and acquisition deals to widen their market presence.
In addition to end users’ desire to outsource non-core activities, the global fire-safety testing sector has received impetus from new safety regulations, with Europe leading the way. In 2011, Europe’s Construction Products Directive was replaced by the Construction Products Regulation, which does not allow any member state to opt out of the mandatory CE marking. Consequently, construction products that fall within the realm of the regulation cannot be sold in the European Union without obtaining the CE mark. These products can include fire door sets and associated ironmongery, fire-resisting ducts and dampers.
Although Europe and North America are large markets, the drop in manufacturing levels in these regions and the simultaneous rise of Asia-Pacific as a manufacturing hub is expected to alter market dynamics. Massive infrastructure investments in Asia-Pacific over the last decade, especially in its emerging markets, have created a fertile environment for fire-safety service providers to thrive, according to the report. In 2015, China, Japan, India and South Korea accounted for 91.9 percent of the total fire-safety services market in the region.
Regional fire-safety companies, especially those that offer just one or two services, typically have low margins. Lower operational costs and proximity to clients will help these companies be more cost-effective. In effect, participants with diversified services, scalability and global presence will have a competitive edge over their peers.
The Analysis of the Global Fire Safety Services Market report, available for purchase from the Frost & Sullivan Web site, is part of the firm’s Test and Measurement Growth Partnership Service program. A Research Sample is also available. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.