Steady demand from end users as well as fresh interest for emerging applications sustained steady market growth for the period between 2003 and 2006.
"Both new building construction and retrofits of existing buildings have remained buoyant, mostly driven by code compliance, thus positively impacting revenue growth," notes Frost & Sullivan Research Analyst Konkana Khaund. "Economic conditions are likely to favor an already upbeat construction market, further driving retrofits."
Analysis from Frost & Sullivan (buildingtechnologies.frost.com), North American Fire Suppression Systems Market, finds the market generated revenues of $653.5 million in 2006, a growth of 10.4 percent over 2005. The market is expected to grow at a compound annual growth rate (CAGR) of 5.6 percent to reach $954.9 million in 2013.
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Capital investments are expected to result in an increase in fire suppression system replacements or retrofits as businesses opt for improvements.
"In addition to the upbeat construction market and sustained demand from end-user industries, changing dynamics in the global political scenario and international security concerns teamed with environmental priorities and the energy crisis are essentially driving the North American fire suppression systems market," Khaund said.
Attention is shifting toward alternate fuels and fuel additives such as ethanol and alternate energy sources such as biodiesel and liquefied natural gas (LNG) due to the energy crisis and fluctuating fuel prices. Rise in alternative fuel and energy facilities represents considerable market opportunities for participating industry segments, particularly for the special type suppression systems.
Due to the war in Iraq, security concerns are on the rise for commercial and industrial facilities alike, particularly in the case of aviation facilities. These factors will certainly drive the participating market segments catering to these specific requirements.
Despite optimistic market conditions, there are challenges participants must overcome. Smaller and niche players find it difficult to maintain their positions because of increased price sensitivity in this maturing market. New participants face barriers to entry because several large companies dominate the market and also participate in acquisition and consolidation activities.
Moreover, existing participants who have difficulty meeting regulatory or statuary requirements are diversifying by introducing alternatives to traditional means of fire suppression, such as gelled halocarbon with dry chemical suspension, powdered aerosols and fluorinated ketone.
There have also been visible efforts focused on products which are not likely to become environmental hazards in the near future. Fluorinated ketone products such as Novec™ 1230, which are positioned as environmentally friendly, expect to gain more sizable share in the market, although price sensitivity will continue to determine their rate of adoption and penetration.
"Industry participants must also focus on continuously improving the performance of existing systems as well as moving toward a comprehensive solution-based offering to secure their position in this growing market," notes Khaund.
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North American Fire Suppression Systems Market N20C