Building Automation and Controls Market

Market Overview

The global building automation and controls market size was valued at USD 130 billion in 2021. It is projected to reach USD 340 billion by 2030, growing at a CAGR of 11.3% during the forecast period (2022–2030). 

The automatic central control for lighting, security, and access control systems, as well as heating, ventilation, and air conditioning systems, is known as building automation and controls. The sensors, detectors, relays, and other intelligent electronics used by the building automation and controls system provide access to a central computing system that allows it to function. They are employed in various business sectors, including retail, hospitality, residential, and industrial. The building automation and controls market is anticipated to develop due to the rising demand for HVAC control, energy-efficient lighting management, and a higher standard of living.

Market Dynamics

Market Drivers

Growing Deployment of Building Automation Systems

The market expansion for building automation and control systems is anticipated to be driven by the expanding deployment of building automation systems in significant office buildings, shopping centers, and public transportation hubs like airports and train stations. The most widely used items in the home, enterprise, and commercial sectors are lighting controls, HVAC controls, and security and access control systems. Security and access control systems have become integral to several industrial verticals as security concerns have increased across all industries. Therefore, the rising demand for HVAC management, energy-efficient lighting control, and a better quality of life is anticipated to boost the global market for building automation systems.

High Demand for Convenient User Experience

The adoption of IoT and AI-integrated electronics and computing systems has increased in some of the top nations. The technologies mentioned above have improved user comfort, decreased human error, and helped to increase safety and security. The user has remote access when IoT technology is incorporated into an electronic system. Additionally, the inclusion of AI gives the tool intelligence, enabling it to build an automated environment. When these technologies are incorporated into building management and control systems, users can experience convenience and worry-free living. Therefore, the advantages such as self-operation, energy saving, and enhanced security using an intelligent access control system have increased its demand globally.

Market Restraint

Lack of Interoperability Between Devices

One of the main obstacles to offering mid-sized buildings cost-effective, high-ROI energy management has been the lack of device compatibility. The requirement to connect outdated building systems (such as roof-top chillers, electric meters, and lighting control panels) with contemporary "over the top" (OTT) gadgets like sensors and switches lead to the interoperability issue. In addition, it is more complicated to normalize the data across the subsystems and deliver it accurately and securely to cloud-based services or apps for analytics, control, dashboards, and reporting. The different protocols and various standards for devices and services have resulted in implementation issues, which hinder the growth of the building automation and controls market across the globe.

Market Opportunities

Development of Smart Cities in Emerging Countries

The market for smart homes and buildings has encouraged the adoption of improved user convenience, increased energy efficiency, and cutting-edge security and access control. It is anticipated that it will serve as the framework for future intelligent buildings in smart cities, which is expected to represent the next significant business potential. It will involve integrating smart building technology with additional lighting and HVAC control systems. The global market sees lucrative potential as smart city initiatives are being adopted more frequently.

Regional Analysis

Region-wise, the global building automation and controls market trends are analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Dominance of Europe in the Global Market

Europe is the highest revenue contributor and is estimated to grow at a CAGR of 9.7% during the forecast period. The increased penetration of digital electronic devices and the high adoption of advanced technologies have provided several growth opportunities for the growth of the building automation and controls market in Europe. The market is likely to exhibit rapid growth in European countries, owing to stricter energy-use regulations, which flourish construction market.

The need to update aging building stock also propels the building automation systems market. Trend such as construction with smart building technology is increasing in Europe, where retrofitting existing buildings is comparatively expensive and complicated. Germany accounts for the largest market share among all European countries due to proactive government initiatives in the form of subsidiaries. These factors would generate lucrative opportunities for the building automation and controls market during the forecast period.

North America is the second-largest region and is projected to reach USD 80 billion by 2030, growing at a CAGR of 10.8%. North America secures a significant share in the building automation and controls market, owing to the rise in the automated security system, wireless sensor network BAS technology-based, and rapid penetration of IoT in buildings. The deployment of building automation systems in North America is growing faster due to the high development of smart cities project and rising demand for advanced technologies. Leading countries such as the US & Canada and government approvals are extending their involvement in the global market. In addition, the prominence of leading building automation systems companies like Siemens, with the evolution of innovation and significant technological contributions, boosts the demand for building automation and controls market.

Asia-Pacific is one of the fastest-growing regions for building automation services. The growth is attributed to the high economic expansion of leading Asia-Pacific countries and the subsequent construction industry growth forecasts. Rapid modernization and willingness to adopt smart cities are also expected to create growth opportunities for building automation and controls market in APAC. Furthermore, many organizations and their facilities are investing in embedded building automation and controls, further boosting the market demand. In addition, the implementation of advanced security systems, high penetration of IoT technology, and rising adoption of wireless technologies are driving demand for building automation and control systems in Asia-Pacific.

Segmental Analysis

The global building automation and controls market is segmented on product type, offering, industrial vertical, and region. 

Based on product type, the global market is divided into HVAC Control, Lighting Control, and Security & Access Control.

The HVAC Control segment is the highest contributor to the market and is estimated to grow at a CAGR of 10.2% during the forecast period. HVAC control system eases the operations of temperature and humidity control. The penetration of artificial intelligence and IoT has advanced the HVAC control system. The control system no more needs wired controls. Instead, it can be remotely controlled by smart devices such as smartphones. HVAC controls are being built with more precise sensors. Also, there are better options for automatically controlled systems based on occupancy and building use. Therefore, the advancement in the HVAC systems drives the growth of the building automation and controls market.

The Lighting Control segment is the fastest growing. Factors like the rise in demand for intelligent street lighting systems, increase in need for energy-efficient lighting systems, and high penetration of LED bulbs and lighting are expected to boost the growth of the building automation and controls market. Furthermore, advancements in wireless communication technology, the rise in developments of smart city projects, and the emergence of IoT technology for smart lighting provide lucrative opportunities for building automation and controls.

Based on the offering, the global market is bifurcated into Integration and Services.

The Integration segment is the highest contributor to the market and is estimated to grow at a CAGR of 10.8% during the forecast period. The growth in infrastructural development, rise in demand for the energy-efficient control system, and surge in demand for security & access control drive the market for integration of building automation and control systems. Furthermore, an increase in R&D activities in AI & IoT is expected to boost the market growth in the future. Now, with the penetration of the inverter-type HVAC systems into the global markets, the situation has dramatically changed. The existing solutions have become inappropriate as an integration option.

The Services segment is the fastest growing. The intelligent solutions integrated for automated control need to be updated regularly for the uninterrupted function of the building automation. Services are typically provided by a solution provider and highly trained local partners.

Based on industry verticals, the global market is classified into Residential, Enterprise, Industrial, Hospitality, Retail, and Others.

The Industrial segment is the highest contributor to the market and is estimated to grow at a CAGR of 11.9% during the forecast period. The combination of building automation and the development of HVAC technology helps manage energy generation, energy distribution, air conditioning, and heat recovery to save resources and costs and efficiently utilize energy. The critical factor for the growth of intelligent buildings in the industrial sector is anticipated to be the sensors used to transfer the information at low rates and high efficiency. Furthermore, all data is compiled and evaluated at a high management level of building automation. The economical operation of the entire building is optimized, creating a growth opportunity for building automation and controls market.

The Residential segment is the fastest growing. Factors such as increased awareness for smart homes, development of application-specific solutions, and increased utilization of connected domestic appliances drive the global market. Developing nations imposing supportive regulatory frameworks and the presence of untapped demands for utilizing smart technologies in buildings are also expected to create lucrative opportunities for market growth. The rising need for HVAC control systems, energy-efficient lighting, and improved living standards boost the demand for building automation and control systems in the residential sector.

The Enterprise segment is the second largest. The adoption of intelligent buildings in the commercial sector has increased, owing to rapidly evolving infrastructure complexities and increased acceptance of application-specific solutions that facilitate smart integration of the connected building management systems. With the increase in awareness and requirement for safety, intelligent building solutions give a safe, secure, and affordable solution, creating a market opportunity. In addition, embedded technologies permit a rapid increase in the number of smart, machine-addressable devices delivered to the market. These smart devices in the Enterprise Internet of Things incorporate machine-to-machine (M2M) wireless communications, which promise to change the landscape of enterprise smart building automation.

Recent Developments

• June 2022 – Siemens AG, a leader in industrial automation and software, infrastructure, building technology, and transportation, and NVIDIA, a pioneer in accelerated graphics and artificial intelligence (AI), announced an expansion of their partnership to enable the industrial metaverse and increase the use of AI-driven digital twin technology that will help bring industrial automation to a new level.
• June 2022 - Siemens AG launched an open digital business platform, Siemens Xcelerator, to accelerate digital transformation and value creation for customers of all sizes in the industry, including buildings, grids, and mobility. The business platform makes the digital transformation more accessible, faster, and scalable. Siemens Xcelerator includes a curated portfolio of internet of things (IoT) enabled hardware, software, and digital services across Siemens and certified third parties, a growing ecosystem of partners, and an evolving marketplace to facilitate interactions and transactions between customers partners and developers.