London — For component suppliers looking for the next big market, IHS is forecasting that annual expenditures for global integrated smart building applications will grow by 150 percent by 2017. IHS forecasts that the global market for integrated equipment in buildings will grow at an average annual rate of 20.3 percent from $12.6 billion in 2012 to $31.6 billion by 2017. Of the total building equipment investment, smart applications are expected to increase from 8 percent to 14 percent over the same period.
IHS defines smart building systems as products unified into a single system, integrating different functions into one solution. These systems may include energy management software and services, door automation equipment, intruder alarms, lighting controls, and HVAC systems.
"One of the key drivers for integrating systems and making buildings more intelligent is the energy efficiency savings that can be achieved,” said William Rhodes, senior market analyst, building technology, for IHS, and the author of the report, "Opportunities in Smart Buildings," in a statement. “While energy efficiency measures represent only one aspect of intelligent building design, their effectiveness is easily quantified and building owners can immediately see the return on their investment.”
Asia is projected to experience the highest growth rate in supplier revenues for integrated building applications, increasing from $4 billion in 2012 to $15.7 billion in 2017. The North American market will follow with revenues increasing from $4.7 billion to $8.9 billion, according to IHS.
The report segments smart building investments by their level of integration with Level One as the highest. The report finds these building systems −centrally managed to drive energy and operational efficiencies− will grow the fastest over the forecast period of 2012 to 2017, growing at an average annual rate of 55.6 percent.
However, the report finds that the majority of new equipment installed in buildings is for non-integrated standalone systems. It also indicates that large, newly constructed or refurbished buildings have at least a basic level of integration, which is expected to increase. Larger buildings typically have a faster payback on investment than smaller and medium-sized buildings, said IHS.