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“Cautious Optimism” Describes the 2010 Building Automation Market

Mar 3, 2010 3:32 PM

According to BCS/2010, the latest market analysis from BCS Partners, cautious optimism prevails for the near future with regard to the building automation market. The market took a serious hit in 2009, but modest growth is expected in 2010-2011. This marketplace, however, isn’t forecast to regain its pre-crisis level until 2012.

Unfortunately, new building construction, particularly in the office building segment, is not expected to provide growth. Existing building retrofits, although still the source of 70% to 75% of the market, are not growing as fast as they should, primarily because smaller building owners are still not sufficiently aware of the benefits available, according to the report. Larger buildings and campuses as well as national franchises tend to have on-staff engineers and analysts with the knowledge and resources to use available technology to reduce costs, but not the great number of smaller buildings that still have little or no advanced building automation in place or even planned.

On the side of positive growth are the many technological advances, primarily wireless data sensors and transmitters, which are rapidly moving from skepticism to accepted reliable solutions. The installation savings and flexibility provided will dramatically increase the numbers and types of system improvements that can and will be instituted to provide greater savings in comfort, productivity, and preventive maintenance in addition to ever more efficient energy management. Integrating the BAS into overall enterprise management is going to further justify additional investment.

BCS Partners sees building control systems as the driver for a much larger enterprise, which totals more $8 Billion in 2010.

• Building controls enterprise ($8+ billion)
• Building controls market ($4.0 billion)
• Building controls product ($1.0 billion)
• Building control systems ($0.5 billion)

The enterprise comprises all revenues associated with the building control function, including performance contracting and facilities management. The market includes all products and services related to the building control function. Product includes all products types associated with building control including actuators, valves, sensors/transmitters, controllers, and other types. Systems include all ddc products and associated software. The monetary figure is the approximate value to North American customers in 2010.

BCS/2010 details the network supplying the building owner with building controls products. The largest piece (36%) flows through mechanical and general contractors. Another 34% flows through control contractors, which include dealers and systems integrators. Controls manufacturer branch offices supply 18%, with the balance (12%) coming from imbedded controls and wholesalers.

Focus on total building operation and maintenance until recently only in the business plans of the largest manufacturers is moving into the plans of the some of the smaller manufacturers. Whether coupled with total air-conditioning equipment or not, the additional total potential for the industry is great and with that comes the opportunity to sell more BAS. On the other hand, it can lessen the focus on the BAS hardware itself, thus making it more complicated for the decision on industry growth forecasts.

Overriding the usual forecasting data is the degree to which the U.S. government’s directions and budget decisions will provide substantial growth for the industry. Manufacturers agree that this can be a substantial factor, but its timing is far from certain. The fastest growth in 2010 is expected in healthcare and educational buildings with commercial buildings not far behind. Lagging, of course, will be office buildings.

Source: BCS Partners

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