US demand to grow 4.3% per year through 2010

US demand for private contracted security services is forecast to advance 4.3 percent per year to $48.3 billion in 2010. Despite falling crime rates through 2004, many consumers remain concerned about violent and property crimes. They perceive a high risk of crime and harbor a belief that public safety officials are overburdened. This perception, as well as the perceived risk from nontraditional threats such as computer-based and other white collar crimes, and terrorism, present significant opportunities for private security firms. Gains will also be fueled by an upward trend in the privatization of some public safety operations such as guarding and correctional facilities management. The ongoing outsourcing of inhouse security functions in certain markets will continue to be a factor, although less of one as this trend matures.

Value-added services to help vendors differentiate

As the market penetration of traditional security services has increased, vendors have sought to promote valueadded services and features. For instance, some firms in the guarding segment, the largest segment of the security services market in 2005, emphasize the amount of training their guards have completed as a way to differentiate themselves from low-price vendors. Advances in the alarm monitoring segment, the second largest in 2005, will be driven in part by specialty offerings such as monitoring of personal emergency response services (PERS), and closed-circuit television systems, and shifts in the type of services available on telematics-based vehicular alarms.

Security consulting to grow the fastest

The security consulting segment is expected to post the strongest annual gains through 2010, albeit from a small base. This segment, along with the systems integration segment, will benefit from the ongoing shift toward the use of more automated electronic security systems, including access controls and surveillance equipment. Above average growth is also expected for the armored transport, correctional facilities management and private investigations segments.

Nonresidential uses to remain dominant, lead gains

In 2005, the nonresidential market accounted for nearly three-quarters of all private security services demand. Growth in the nonresidential market will also outpace the residential market through 2010, driven in large part by the ongoing trend of the government market outsourcing services such as guarding and correctional facility management.

The size of the geographic market for private security services is closely linked to an area?fs population size and density, level of urbanization, real local crime rates, perceived crime rates and economic growth. For instance, in 2005, the Pacific subregion, which features several large urban centers, was the largest geographic market for private security services, while the more rural East South Central subregion was the smallest.

Study coverage

This new Freedonia industry study, Private Security Services, presents historical US demand data (1995, 2000, 2005) and forecasts to 2010 and 2015 by service type, market and region. The study also considers market environment indicators, evaluates market share and profiles 42 firms.

INTRODUCTION

I. EXECUTIVE SUMMARY

II. MARKET ENVIRONMENT

General

Demographic & Social Environment

Demographic Trends

Employment Outlook

Macroeconomic Outlook

Consumer Spending Trends

Building Construction Trends

Business Establishment Trends

Manufacturing Outlook

Motor Vehicle Outlook

Retail Sales Outlook

Service Sector Outlook

Public Safety Environment

Crime

Violent Crimes

Property Crimes

Terrorism & Other Nonconventional Crimes

Adult Inmate Trends

Fire

Technological Environment

Regulatory Environment

Regulations by Segment

Recent Developments

World Markets

III. SECURITY SERVICES

General

Guarding

Market Trends

Pre-Employment Screening

Training

Wages & Benefits

Applications

Vendors & Market Share

Alarm Monitoring Services

Residential Intrusion & Fire

Demand Trends

Threats

Nonresidential

Vehicular Security

Demand Trends

Threats

Subscribers

Personal Emergency Response Service

Vendors & Market Share

Competition

Leading Vendors

Private Investigation Services

Market Trends

Vendors

Armored Transport Services

Traditional Armored Transport

ATM Servicing & Other

ATMs

Other Services

Vendors & Market Share

Correctional Facilities Management

Market Trends

Market Threats

Vendors & Market Share

Systems Integration & Management

Services & Technologies

Vendors

Security Consulting

Services

Vendors

Pre-Employment Screening

Trends

Vendors

All Other Security Services

IV. MARKETS

General

Nonresidential

Commercial

Commercial Offices & Office Buildings

Financial Institutions

Retail

Other Commercial

Government

Industrial

Manufacturing Facilities

Warehouses

Institutional

Health Care Facilities

Schools

Other

Public Venues

All Other

Residential

Alarm Monitoring

Guarding & Other

V. GEOGRAPHIC MARKETS

General

Regional Demographic & Economic Trends

Population Patterns

Economic Outlook

Construction Activity

Public Safety Trends

Regional Crime Rates

Local Crime Trends

Fire Trends

Regional Private Security Services Overview

Northeast

Market Outlook

New England

Middle Atlantic

Midwest

Market Outlook

East North Central

West North Central

South

Market Outlook

South Atlantic

East South Central

West South Central

West

Market Outlook

Mountain

Pacific

Major Metropolitan Areas

Correctional Facility Management

VI. INDUSTRY STRUCTURE

General

Industry Composition

Market Share

Securitas

Tyco

Group 4 Securicor

Corrections Corporation of America

Allied Security

Brink?fs

Competitive Strategies

Marketing

Nonresidential

Residential

Mergers & Acquisitions

Cooperative Agreements

COMPANY PROFILES

ABM Industries Incorporated

ACP Engineering Incorporated, see United Technologies

Corporation

ADEMCO Group, see Honeywell International Incorporated

ADT Security Services Incorporated, see Tyco International

Limited

Aerwav Holdings LLC

AFA Protective Systems Incorporated

AFI International Group Incorporated, see TransNational Security

Group LLC

Akal Security Incorporated

Allied Security Holdings LLC

AlliedBarton, see Allied Security Holdings LLC

American Commercial Security Services, see ABM Industries

Incorporated

Ameriflight Incorporated, see ATI Systems International

Incorporated

Amguard Security and Patrol Services, see ABM Industries

Incorporated

Apollo Security Incorporated, see TransNational Security

Group LLC

ArmorGroup International Limited

ATI Systems International Incorporated

Barton Protective Services LLC, see Allied Security

Holdings LLC

Brambles Group

Brink?fs Company

Care Technologies Incorporated, see Lifeline Systems

Incorporated

ChoicePoint Incorporated

Chubb North America, see United Technologies Corporation

Cornell Companies Incorporated

Correctional Services Corporation, see GEO Group

Incorporated

Correctional Systems Incorporated, see Cornell Companies

Incorporated

Corrections Corporation of America

Counterforce USA Incorporated, see United Technologies

Corporation

Day & Zimmermann Group Incorporated

(continued on next page)

Delaware Depository Service Company, see ATI Systems

International Incorporated

Dunbar Companies

Dussmann AG & Company KGaA

Examination Management Services Incorporated

Federal Security Systems, see US Security Associates

Incorporated

FirstService Corporation

GEO Group Incorporated

G4S International, see Group 4 Securicor plc

Group 4 Securicor plc

Guardsmark LLC

Hamilton Pacific LP, see Securitas AB

HomeGuard Security Services, see United Technologies

Corporation

Honeywell International Incorporated

Honeywell Security Monitoring, see SecurityCo Incorporated

HSM, see SecurityCo Incorporated

Initial Security Services, see Rentokil Initial plc

Innovative Security Solutions Incorporated, see FirstService

Corporation

Inter-Con Security Systems Incorporated

Intercon Security Limited, see FirstService Corporation

International Management Assistance Corporation, see

TransNational Security Group LLC

Jackson Burglar Alarm Company Incorporated, see SecurityCo

Incorporated

Johnson Controls Incorporated

Kessler International

Kroll Incorporated, see Marsh & McLennan Companies

Incorporated

Level 5 Security Incorporated, see Westec InterActive

Security Incorporated

Lifeline Systems Incorporated

Loomis, Fargo & Company, see Securitas AB

Management & Training Corporation

Marsh & McLennan Companies Incorporated

(continued on next page)

Mason & Hanger Group Incorporated, see Day &

Zimmermann Group Incorporated

National Alarm Pro, see SecurityCo Incorporated

OCS Security Incorporated, see Rentokil Initial plc

Pay-O-Matic Corporation

Pedus Service Incorporated, see Dussmann AG & Company KGaA

Premier Residential Security USA, see US Security Associates

Incorporated

PROTECT Emergency Response Systems Incorporated, see

Lifeline Systems Incorporated

Protection One Incorporated

Rapid Armored Corporation, see Pay-O-Matic Corporation

Recall Corporation, see Brambles Group

Rentokil Initial plc

Secom Company Limited

Securicor plc, see Group 4 Securicor plc

Securitas AB

Security Forces Incorporated, see TransNational Security

Group LLC

Security Services & Technologies, see FirstService

Corporation

Security Services of America, see ABM Industries

Incorporated

SecurityCo Incorporated

Sentinel Guard Systems, see ABM Industries Incorporated

Siemens AG

SimplexGrinnell LP, see Tyco International Limited

Software House, see Tyco International Limited

Spartan Security Services Incorporated, see Temco Service

Industries Incorporated

SPX Corporation

Star Protection Agency LLC, see TransNational Security

Group LLC

Temco Service Industries Incorporated

TransCor America LLC, see Corrections Corporation of

America

TransNational Security Group LLC

Tyco International Limited

United Technologies Corporation

US Investigations Services Incorporated

US Security Associates Incorporated

Wackenhut Corporation, see Group 4 Securicor plc

Westec InterActive Security Incorporated

Wornall Electronics Incorporated, see Securitas AB

Other Companies Mentioned in Study

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table

SECTION II -- MARKET ENVIRONMENT

1 Population & Households

2 Employment Outlook

3 Macroeconomic Environment

4 Consumer Income & Spending Patterns

5 Building Construction Expenditures

6 Business Establishments

7 Manufacturers?f Shipments

8 Motor Vehicle Park, Production & Sales

9 Retail Sales

10 Service Income

11 Public Safety Sector Employment

12 Violent Crime Levels

13 Property Crime Levels & Losses

14 Terrorism & Other Selected Nonconventional Crime Levels

15 Adult Inmate Trends

16 Fire Levels & Losses

SECTION III -- SECURITY SERVICES

1 Security Service Market

2 Security Guard Market

3 Alarm Monitoring Market

4 Residential Alarm Monitoring Market

5 Nonresidential Alarm Monitoring Market

6 Telematics & Vehicular Alarm Monitoring Market

7 Personal Emergency Response Service Market

8 Private Investigation Market

9 Armored Transport Service Market

10 Correctional Facilities Management Market

11 Selected Correctional Facilities Management Contract

Agreements

12 Systems Integration & Management Service Market

13 Security Consulting Market

14 Pre-Employment Screening Market

15 All Other Security Services Market

SECTION IV -- MARKETS

1 Private Security Service Revenues by Market

2 Nonresidential Security Service Revenues by Market

3 Commercial Security Service Revenues by Type & Sector

4 Commercial Offices & Office Buildings Security Service

Revenues

5 Financial Institutions Security Service Revenues

6 Retail Markets for Security Services

7 Other Commercial Markets for Security Services

8 Government Security Service Revenues

9 Industrial Security Service Revenues by Service & Market

10 Institutional Security Service Revenues by Service & Market

11 Other Nonresidential Markets for Security Services by Service

& Market

12 Residential Security Service Revenues

SECTION V -- GEOGRAPHIC MARKETS

1 US Population by Region

2 GDP by Region

3 Construction Activity by Region

4 Crime Rates by Region

5 Reported Crimes by Type of Area

6 Regional Fire Overview, 2004

7 Private Security Services Market by Region

8 Northeast Security Services Market Profile, 2005

9 Northeast Security Service Revenues by Subregion

10 Midwest Security Services Market Profile, 2005

11 Midwest Security Service Revenues by Subregion

12 South Security Services Market Profile, 2005

13 South Security Services Market by Subregion

14 West Security Services Market Profile, 2005

15 West Security Service Market by Subregion

16 Private Security Services Market Profile by Selected Major

Metropolitan Areas, 2005

17 Private Security Services Market by Selected Major

Metropolitan Areas

SECTION VI -- INDUSTRY STRUCTURE

1 US Security Service Revenues by Company, 2005

2 Selected Acquisitions & Divestitures

3 Selected Cooperative Agreements

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT

1 Safety Sector Employment, 2005

2 US Crime Rates, 1995-2004

3 World Security Services Market, 2005

SECTION III -- SECURITY SERVICES

1 Security Service Market by Type of Service, 2005

2 Security Guard Market Share, 2005

3 Alarm Monitoring Demand by Market, 2005

4 Alarm Monitoring Market Share, 2005

5 Armored Transport Services Market Share, 2005

6 Correctional Facilities Management Market Share, 2005

SECTION IV -- MARKETS

1 Private Security Service Revenues by Market, 1995-2015

2 Nonresidential Security Service Revenues by Market, 2005

SECTION V -- GEOGRAPHIC MARKETS

1 Crime Rates by Region, 1995-2004

2 Private Security Services Market by Region, 2005

3 Percent of Total Inmates under Private Management Contracts

by Subregion, 2004

SECTION VI -- INDUSTRY STRUCTURE

1 Private Security Services Market Share, 2005