Many of the projects that stalled in 2020 across the Middle East were restarted in 2021 as government regulations eased and vaccines kicked in. In April last year, the IMF has predicted that the road to recovery in the Middle East and Central Asia would remain long and divergent. Of course, this would vary from country to country depending on the socio-politic and economic conditions in the region.

Growth in several verticals picked up in 2021, and they could continue well into 2022. This article examines demand in different sectors and how major companies and consultants expect activities to unfold in the coming year.

 

 

Smart city investments continue

A key vertical for the region is smart cities and communities. Security plays a significant role in providing safer and more secure living environments for citizens and residents. In the Middle East, governments prioritize this transition with major development projects taking place, and advanced security is a priority for building future cities.

According to Sertac Yurter, Regional General Manager, Commercial Security at Honeywell Building Technologies in the Middle East, Turkey, and Africa, this is aligned with long-term economic development and diversification plans such as Saudi Vision 2030 and Egypt Vision 2030.

"On a broader scale, the plans entail the development of cities underscored by environment, social and governance goals with the objective of enhancing the safety of cities and safeguarding the well-being of residents to provide enhanced living," Yurter said.
With these developments planned or underway, city-wide and critical large-scale infrastructures such as airports will likely remain important in the near future as they look to establish sustainable recovery, while warehousing and data centers are also emerging verticals spurred by the growth of e-commerce.

 

 

Government regulations for commercial segments

Regional governments are also proactively implementing high-standard regulations for security systems, which is also driving the growth of the physical security market, especially in sectors such as commercial buildings, banks, healthcare, and hospitality.

"These sectors continue to invest in solutions to become healthier, smarter, more connected, and more efficient to offer enhanced occupant experiences," Yurter said. "One example is our alliance with Augmented Identity leader IDEMIA that integrates Honeywell's security and building management systems with IDEMIA's biometric-based access control systems to create frictionless, safer, and more efficient buildings."

 

 

Retail in focus as pandemic continues

As the pandemic made social distancing necessary, retail stores had to think out of the box to stay in business. As the economies reopened, this became even more important as government mandates required crowd control to minimize risks. Security companies came to the rescue at this point, with various solutions that allowed retailers to continue business as usual.

Binson Xu, Regional President at Hikvision MENA explained that major challenges for retail in the new normal are enabling high-efficiency management and elevating standards across branches.

"To help retailers, Hikvision aims to create centralized systems and link all their branches and teams together, ensuring the efficient operation of the business," Xu said. "Hikvision's goal is to help retailers improve operation with efficient management."

 

 

Oil and gas, construction in demand

The oil and gas sector has traditionally been the biggest vertical in the Middle East. Along with construction, this continues to attract demand for the security industry.

"Many projects in oil and gas as well as construction, while slowing down and for periods may have paused, are beginning to resume, especially in Saudi Arabia where there is an appetite to move forward at an often-frantic pace," said John Cowling, a security consultant.

"A number of mega projects in Saudi Arabia continue to drive the regional growth security (and other) sectors although the regulatory and business culture parameters and constraints are often hampering market entry by new players, rather favoring the existing providers who have well established and trusted supply chains with personnel who understand the cultural requirements."

Ettiene Van Der Watt, Regional Director for the Middle East and Africa at Axis Communications, added that throughout the Middle East territories, especially the UAE, Qatar, Saudi, and Egypt, many infrastructure projects are in hyperdrive.

"We also continuously see growth in critical infrastructure because that's the nature of the region," Van Der Watt said.

 

 

Conclusion – what this means for integrators

The Middle East market is definitely recovering, but the process is far from streamlined. Some of the verticals are growing faster than others, and this would impact the way security systems integrators may want to plan their operations in the coming year.