Macroeconomic Factors and Lack of Legislative Support Restrain Growth in Global Building Automation Market

The building automation market is dependent on growth factors such as energy efficiency, supportive legislation and regulations for energy efficiency in buildings, as well as buildings' end-user comfort, advancements in digital technology, and growth in commercial construction.

The growth is restrained by macroeconomic factors and a lack of legislative support in several countries. BRIC nations, the United States, and Germany will be prime growth spots due to stabilising economies and increased infrastructure spending. Meanwhile, Asia-Pacific and Africa are price-driven markets. Intelligent controls, intact integration of the building system, interoperability, and scalability of the system will play a major role in shaping the market.

Key Findings

• The global building automation (BA) market was estimated to be $ billion in 2013 having grown at% compared to 2012.
• The key application market in 2013 was retail buildings, while the largest region for revenue in 2013 was Europe.
• The market is expected to grow at a compound annual growth rate (CAGR) of % between 2013 and 2018 wherein BA for data centre applications will witness the most rapid growth.
• Customers' price sensitivity is high in regions such as Africa, Asia-Pacific, and certain parts of Europe. A boost in the awareness level of BA benefits will drive market growth in these regions.
• Research and development (R&D) spend in the market is increasing and marketing spend is stable.
• Europe will retain the major share of market revenue throughout the forecast period.
• Internationally, the big companies constitute the Tier I in the competitive structure, accounting for % of the global BA market.
• A strong BA market for the retail sector and office applications will sustain these segments' market share dominance throughout the forecast period.
• The key driving factors of the global BA market are energy efficiency attained from BA systems, regulations and legislations supporting energy efficiency in buildings, the comfort of buildings' end users, technological advancements, and growth in commercial construction.
• Distributors and system integrators dominate the sales distribution channels globally. Direct sales from manufacturers is high in regions of high economic activity.
• The BA controller pricing is decreasing with the decrease in component costs, whereas BA software pricing is increasing with the increasing demand for additional features such as buildings' green data analytics.
• Competitive pricing, providing end-to-end solutions on-site, and a focus on branding in the market are few of the key success factors for companies in the global BA market.
• Tier II companies who are global participants are gaining market shares faster and offer niche, customised solutions for small- and medium-sized projects.
• Demand for BACNet-based BA devices and systems is growing quickly and BACNet is emerging as the globally dominant protocol for BA.
• Macroeconomic imbalance, political conditions, low levels of customer awareness, and a lack of product standardisation restrain the growth of the market and remain the key challenges to overcome.

Market Definitions

• The building automation (BA) market is defined by the manufacturer revenue earned from the sale of automation controllers and associated automation and supervisory software. Channel revenue is excluded from the scope of the study.
• Automation controllers are either application-specific with limited capabilities or general purpose in functionality with capabilities beyond automation such as interfacing, data collection and monitoring, and communication. Associated software is the configuration software for the controllers and the supervisory software installed in a work station (computer).
• Field-level devices such as sensors, actuators, switchboxes, the cabling needed for the system, and computers are excluded from the scope of the study.
• Revenue is calculated from the end regional demand for automation controllers and associated software and not based on the region where these hardware and software are manufactured.
• Revenue does not include margins set by channel partners, such as distributors and system integrators, and value-added services.
• The price of controllers and software are forecasted based on the average selling price (ASP) in the market.
• The regions covered in this study are:
  • North America (United States and Canada)
  • Europe (Western Europe, Central and Eastern Europe, Commonwealth of Independent States)
  • Asia-Pacific (Asia, Australia, and New Zealand)
  • Africa
  • The Middle EastoLatin America (including Mexico) -Application markets considered in the above regions are buildings in the following sectors:
  • Data centresoEducational buildings (schools and universities)oHospitality and leisure (hotels, resorts, casinos, and sport facilities)
  • Healthcare buildings (hospitals and laboratories)
  • Industrial buildings (manufacturing plants and warehouses)
  • Office buildingsoPublic buildings (museums, worship places, prisons)
  • Retail buildings (shops and shopping malls)