• Despite considerable differences: all specialist sectors show growth
• Legal framework and construction sector pose challenges for the industry, digitalization offers further growth opportunities
• Shortage of skilled workers an ever greater problem

In 2023, the market for electronic security technology in Germany recorded an increase in turnover of 3.6% to more than 5.3 billion euros. “Overall, growth in 2023 was slightly lower than in the two previous years. There are also considerable differences between the individual trades – but the important thing is that everyone was able to grow,” said Dirk Dingfelder, Chairman of the ZVEI Security Association. “The trend towards the integration of electronic security technology through digitalization and networking has been confirmed. The market is continuing to develop towards networked products and systems, and the importance of the software component and accompanying digital services is steadily increasing,” said Axel Schmidt, Chairman of the Board of BHE Bundesverband Sicherheitstechnik e.V. (German Security Technology Association).

The fact that the building sector can and must make a significant contribution to the success of the energy transition not only increases its political relevance, but also contributes to the positive market development of electronic security technology: “Wherever security technology can make a recognizable contribution to improving the energy efficiency of buildings, it is supported by politicians,” explained Dingfelder. The promotion of elevator shaft smoke extraction and ventilation systems to save CO2 is a concrete example of this.

On the other hand, the business development of safety technology is strongly determined by the construction industry. “The signs for construction are not particularly good at the moment,” says Schmidt. “In particular, the number of new building permits, which recently fell by around 25 percent, is a cause for concern.”

The legal framework also presents particular challenges: “The European Construction Products Regulation presents us with new processes in standardization. The consequences are far-reaching and not yet fully foreseeable,” says Dingfelder. “The personnel situation in the security market is also becoming increasingly problematic,” added Schmidt. The shortage of skilled workers is significantly increasing the pressure on the industry

Individual trades grow at different rates

Sales of fire alarm technology – by far the largest trade in electronic security technology, which is also heavily dependent on the construction industry – rose by 3.3% to 2.51 billion euros in 2023. Voice alarm systems increased by 2.3% to a turnover of 133 million euros.

Video systems once again recorded above-average growth with an increase in sales of 5.9% to 790 million euros. The wide range of possible applications and the flexibility of video security technology in combination with other technologies ensure continued high growth. Access control systems also performed well in the market with an increase of 6.8% to 485 million euros.

Growth in hold-up and intruder alarm systems was again somewhat weaker in 2023, rising by 1.0% to 900 million euros. The discontinuation of KfW subsidies for private burglary protection is having an effect here, although the number of residential burglaries has recently risen again significantly.

Smoke and heat extraction systems, including natural ventilation (SHEVS/NL), recorded a slight increase to 177 million euros. On the other hand, other technologies such as call systems in accordance with DIN VDE 0834, escape door systems, nurse call systems and other systems and components increased significantly by a total of 5.8 percent.

Decline in orders in the German electrical and digital industry slows down

Production and sales recently recorded growth

At minus 4.7%, the German electrical and digital industry recorded a much more moderate decline in incoming orders in April 2024 than in the first quarter of this year (-13.2%). While domestic orders fell by 13.8%, orders from foreign customers increased by 4.0% in April. New orders from the eurozone were up 2.0% on the previous year and 5.3% from third countries.

In the first four months of this year as a whole, orders were still 11.3% down on the previous year. Domestic orders fell by 14.5 percent. The value of foreign orders was 8.6% lower than in the same period of the previous year (eurozone: – 7.6%, non-eurozone: – 9.2%).

Real production of electrical and electronic goods in Germany, i.e. adjusted for price effects, increased again by 3.0% in April 2024 compared to the previous year. “The fact that April had three more working days this year than in the same month last year certainly contributed to this, after it was the other way around in March,” said ZVEI Chief Economist Dr. Andreas Gontermann. In the first four months of this year, aggregated industry output fell short of the previous year’s level by 8.0%.

At EUR 18.7 billion, nominal revenue in the German electrical and digital industry in April 2024 was 4.0% higher overall than in the same month of the previous year. Turnover with domestic customers amounted to €9.1 billion (+5.0%) and €9.6 billion (+3.1%) with foreign customers. While revenue with business partners from the eurozone increased by 2.3% to EUR 3.5 billion in April, revenue with customers outside the single currency area rose by 3.6% to EUR 6.1 billion.

From January to April 2024, aggregated industry revenue fell by 5.8% year-on-year to EUR 74.1 billion. In the first four months, business worth EUR 35.7 billion was conducted in Germany (- 6.0%) and EUR 38.4 billion abroad (- 5.6%). The development of sales with partners from the eurozone (- 4.4% to € 14.1 billion) was less unfavorable than with customers from third countries (- 6.3% to € 24.3 billion).

There were no significant changes in either production or employment plans in May 2024 compared to the previous month. At the end of the first quarter of this year, the German electrical and digital industry employed 900,700 people, 30,200 of whom are currently on short-time work.

“The business climate has recently brightened up again after the setback in April,” said Gontermann. “Both the assessment of the current situation and general business expectations were better than in the previous month.” Export expectations also increased in May.