Is the Commercial on a Hot Streak?
New construction continues to be a driving force in the commercial
fire market, garnering $600 million annually. However, upgrades are commanding
an equal share of this $3 billion pie.
If you've been following
the fire market closely, you not only know the market for commercial fire
alarm systems is growing but you're actually reaping the benefits from
this burgeoning trend.
According to a new report, entitled "Domestic Fire Alarm Industry Report:
Market and Influence Considerations" second edition, it is estimated that
the market for the installation of commercial fire alarm systems in the
United States is $3 billion, and will continue to ascend at a 3-percent
to 5-percent pace. Because the market covers all categories of building
occupancies, it will tend to be balanced by both upward and downward trends
in the individual categories.
The study, conducted by FIREPRO(r) of Andover, Massachusetts and Sandra
Jones and Company of Chardon, Ohio, covers 11 categories of occupancy:
Assembly, Education, Healthcare, Lodging, Manufacturing, Mercantile, Multi-Family/
Apartment, Office, Public, Religious and Warehouse. The largest segments
are Office and Mercantile occupancies, which capture fewer than 25-percent
and more than 19-percent marketshare, respectively.
These systems provide
varying functions, such as providing automatic fire detection and alarm,
manually activating a fire alarm, or monitoring fire protection systems
like sprinkler systems, for alarm and supervision.
As new technology
enables companies to expand their product and service offerings to the
new construction market, dealers are also capitalizing on commercial upgrades
in the Fire Market
The market has seen
shifts during the past few years that have resulted in a net increase
in the annual market. Further development in addressable and analog technologies
has led to higher equipment costs, while reduced installation costs and
the advent of the Americans with Disabilities Act (ADA) have resulted
in increased requirements for alarm notification appliances and power
supplies to support them.
In the future, there
will be more use of voice evacuation systems, as the requirement for their
use has been expanded to smaller assembly occupancies.
Fire Codes Influence
Many buildings that
were constructed prior to the adoption of modern building codes were never
equipped with fire alarm equipment. As these buildings age, they are modernized
with new interiors, energy efficient glazing and air conditioning systems.
When these buildings are upgraded for visual, environmental and occupant
comfort, many building codes also trigger requirements that fire alarm
and fire protection systems be installed. The trigger point in many of
these codes is called substantial renovation.
The substantial renovation
point is a monetary point where the money spent on voluntary modernization
passes a defined threshold. After this threshold is met, it is deemed
that the work on the building is not simply maintenance, and therefore,
it is reasonable to expect the fire alarm systems and other fire protection
features to be upgraded to a new building performance standard.
Can Demand a Sophisticated System
Systems will be installed
in buildings varying in size from less than 10,000 square feet of floor
space to more than 500,000 square feet. Suppliers will find the amount
of spending will be balanced throughout the demographics of building size;
however, the majority of the systems will be required for small buildings
(those less than 10,000 square feet in floor space).
The smaller building system functions will be mostly combined with security
systems into a single control panel, while the larger systems will be
standalone, full-function systems. Despite the fact building codes require
many structures to have fully automatic fire detection and alarm systems,
some buildings are not required to have a fire alarm systems at all.
How Will the Fire
Market Pie Be Divided?
The $3 billion market
value is the final installed cost that building owners will pay for the
systems. The value-added chain for this market includes the installation
cost; the cost of installation materials, such as wire, conduit, boxes
and mounting hardware; the cost from the manufacturer of the equipment,
and the cost from the distributor for designing the system and selling
and handling the equipment. In terms of the market-value split, 55 percent
will go to the system installers, while approximately 28 percent will
go to the system equipment manufacturers. The remaining 17 percent is
divided between the distributors of the systems and the suppliers of the
The full print version of this article can be obtained by contacting Dini
Leighton (firstname.lastname@example.org) or by calling (440) 285-4444.