THE U.S. NON-RESIDENTIAL BUILDING CONTROLS MARKET - 2014
In 2014, BCS Partners project that the overall building controls market in non-residential buildings will slightly exceed $4 Billion. This total includes building automation systems and software, data communications hardware and software, measuring instruments, transmitters and associated hardware as well as actuators and automated valves/dampers. It also includes engineering services for design, installation and system commissioning as well as on-going operation and maintenance.
Since this marketplace hit bottom in 2010, it has grown substantially, increasing by about 3% in 2014 versus 2013. Recent market strength has been built largely on existing building retrofits but, in 2013, the first glimmers of a resurgent new construction sector began to emerge. This trend appears to be escalating in 2014.
For the last decade or so, BCS Partners has prepared a U.S. Building Controls Market breakdown by metropolitan area. The U.S. total is subdivided by 112 metropolitan areas determined by the 2010 Census to have populations of over 500,000. In 2014, these ranged from #1 New York- Westchester ($242.5 Million) to #112 Jackson, MS ($9.1 Million). Factors used in this model include: Population Growth (U.S. Census), Existing Building Stock (U.S. DoE), New Construction (McGraw-Hill Dodge), Electrical Labor Costs (R.S. Means), Utilities Cost (BOMA).
BCS Partners originally developed this model for a customer project in the mid 1990s as an assist in the selection and motivation of local dealers. It has been refined continuously since then and can be tailored for specific control product/control service submarkets within the overall building controls framework.
BCS PARTNERS' PRINCIPAL HONORED BY ASHRAE.
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Written by building controls professionals with extensive experience in and knowledge of this marketplace.
Over 50 years of cumulative experience serving all aspects of the building controls market.
NEW PARADIGM FOR HMI IN BUILDING AUTOMATION
"Better Off Without Us"
- by Ron Caffrey
- Principal BCS Partners
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For a BAS definition and supplier list go to: www.buildingautomationsystem.org
Terry McMahon (firstname.lastname@example.org)
An independent consultant since 1968 specializing in industrial instrumentation markets. Published columnist for Control Magazine (AROUND THE LOOP - 14 years), MEASURING MARKETS (Trade Assocation Newsletter - 8 years), CHEMICAL ENGINEERING PROGRESS (Process Automation Corner - 4 years). He is a graduate of M.I.T. and Yale.
McMahon has authored over 60 multiclient market reports since 1973 including 12 on building controls.His 500+ projects include dozens of proprietary building controls investigations.
Ron Caffrey (email@example.com)
Thirty plus year career with Johnson Controls including, field sales, branch and regional management leading to 15 years as V.P. Marketing. Participated in major acquisition analysis, controls market strategy development, product planning & development including the rollout of Metasys in 1990. He is a graduate of Yale.
Caffrey is a Life Member and former Director of ASHRAE. He was the Founding Chairman of the Intelligent Buildings Institute and has served as a marketing consultant to a dozen companies, large and small.
BCS Partners was organized in 1993 to provide market analysis and research services for building automation and related technologies. Published professional market research reports, proprietary research investigations, sales management tools, due diligence studies, business combination analysis and more.
Building Automation Systems
The Market, It's Development & Growth
BCS Partners are uniquely qualified to analyze and critique this industry. Its two Principals personally participated in the birth of this technology in the pneumatic, thermostatic controls of the early 1950s as well as its rebirth in the Energy Crisis of 1973. During the latter, the building automation industry leap-frogged from pneumatic analog to computer-based ddc. This transition hugely broadened the purview of "Building Automation". Its effects continue to impact this marketplace as non-residential (N-R) building owners and operators demand increasingly comprehensive solutions from building automation suppliers.
In the 1950s and 1960s, controlling the cost of building operations manpower was the driving force for centralizing building control operations. After the 1973 Arab Oil Embargo and the subsequent dramatic jump in crude oil prices, energy conservation in N-R building operation became the principal focus of building automation. In the decades since, building illumination has been added to HVAC as a major source of energy conservation. The development of cost-effective wireless controls was the enabling technology for the widespread deployment of building lighting control.
Building access, perimeter protection and security are routinely integrated within building automation systems. Fire alarm and protection system s are largely stand alone by fire code in most jurisdictions but feed status information to the automation system. A major supplier has described th e building automation function as managing energy, comfort and protection.
Beyond these primary building functions, building automation related services are an important area of profitable growth for automation suppliers. On going maintenance of installed building automation systems has traditionally been a profit center but performance contracting takes this a step further. The building owner commits no capital for the system installation and, in some cases, no dedicated operating personnel for the system's use. The automation vendor is compensated via a predetermined share of the building owner's energy savings.
From the original control & reporting package narrowly focused on the building's HVAC mechanical system, the building control enterprise now incorporates information channels to higher-level Management Information Systems (MIS) as well as off-site web-based systems. This expanding market scope shows no sign of slackening. Once the technically demanding building control function has been out-sourced, the more mundane building operations functions often cannot justify the additional corporate overhead incurred. Total Facilities Management is the alternative frequently sought, another market opportunity for building automation suppliers.
Growth predictions have recently been tempered by caution about governmental mandates requiring energy conservation and related investments. These concerns are waning. The LEED ( Leadership in Energy and Environmental Design) standards for energy efficient buildings are internationally recognized and have been adopted by virtually all non-residential builders. In many cases, even spec office construction is LEED compliant. In concert with LEED, the focus on preserving the environment has created the Green Building Certification Institute whose standards require more control and automation in addition to energy-efficient building materials and design criteria.
Since 1993, BCS Partners have published six (6) editions of their widely-cited Building Controls Market Report. As shown on our home-page, the U.S. building controls market exceeded a value of $4 Billion in 2014 excluding security and fire-alarm related revenues.
BCS Partners define the Building Controls Enterprise as including all of the revenues associated with the function of building control plus performance contracting and facilities management. The more narrowly defined Building Controls Market includes all equipment and services involved in the building control function. The Enterprise value includes the Market which typically accounts for about 40% of the (Enterprise) total..
An important research focus for BCS Partners has been the distribution network linking the building automation supplier with the ultimate buyer, the building owner/operator. This network includes General and Mechanical Contractors, Control Contractors including Dealers and System Integrators, OEMs and Distributors. Controls Manufacturers' branch offices are also a crucial network node.
BCS Partners can guide their clients through this complexity, providing quantitative estimates for the various network paths. BCS Partners has served both strategic and financial acquirers in due-diligence and related investigations.