The European building automation market is expected to reach a value of USD 4,247.11 million by the next five years, registering a CAGR of 3.73% over the forecast period.
- A building automation system (BAS), also referred to as a building control system or a building management system, is a system that controls several electric, electronic, and mechanical systems throughout a building. The report tracks the revenue accrued by companies through the sale of building automation solutions worldwide. Components like building management systems, lighting controls, fire detection, HVAC controls, and security systems are included in the scope of the study and span across end users, like residential and commercial.
- The building industry is essential to meeting the energy and environmental objectives of the EU. Better and more energy-efficient structures will also raise living standards for residents, reduce energy poverty, and benefit the economy and society by creating green jobs and other advantages like better indoor air quality and health.
- The demand for Internet of Things (IoT) products is growing across Europe. The region’s IoT adoption is now being led by Germany, the United Kingdom, and the Netherlands, while Eastern Europe and the Nordics are closely trailing. Although the manufacturing, housing, health, and finance industries are leading the way in IoT adoption, the retail and agricultural industries are also experiencing significant development. Demand for outsourcing is still being driven by a lack of qualified specialists and a growing willingness to outsource.
- Technology for building automation systems (BAS) has advanced significantly and is always becoming better with new capabilities. It is noteworthy that many building managers still manually operate HVAC systems because they have little faith in the building automation system. Far too many buildings with perfectly functional building automation systems have their equipment being run manually by the building operators, whether due to a lack of understanding or the building automation system not being configured properly by the installation contractors.
- With the COVID-19 outbreak, most commercial and industrial construction projects started at a slow pace, while some were canceled. Production lines at some HVAC manufacturers had to be put on hold for several weeks, and installers saw their new installation projects limited by sanitary guidelines. However, in European countries such as Italy, AHU sales benefitted from the increased ventilation demand due to COVID-19. After the pandemic, commercial and industrial construction projects started, which propelled the market growth.
Rapid Growth of IoT in European Countries to Drive the Market
- The demand for Internet of Things (IoT) products is growing across Europe. The region’s IoT adoption is now being led by Germany, the United Kingdom, and the Netherlands, while Eastern Europe and the Nordics are closely trailing. Although the manufacturing, housing, health, and finance industries are leading the way in IoT adoption, the retail and agricultural industries are also experiencing significant development. Demand for outsourcing is still being driven by a lack of qualified specialists and a growing willingness to outsource.
- After North America and the Asia-Pacific area, Europe is the third-largest adopter of IoT, according to the CBI Ministry of Affairs. The European IoT market is growing at a double-digit rate each year, the growth rate being more than 10%. In addition to its expanding market size, Europe is particularly intriguing since both consumer and industrial IoT present prospects, and these opportunities may be found across various vertical industries. There is more space for outsourcing because of the growing IoT market and the skills gap.
- Despite expectations from experts that the COVID-19 pandemic would momentarily halt the market, this never actually happened. during the pandemic, IoT turned out to be more important than ever. According to a global industry survey, 84% of respondents said that the COVID-19 pandemic’s issues had pushed or intended to accelerate the adoption of IoT.
- According to GSMA, 4.325 billion IoT connections are anticipated in Europe by 2025, with about one billion of those connections occurring in the smart home and smart building sectors. By 2025, the European smart health market will have about 27 million IoT connections.
- Moreover, Ireland-based start-up Safecility was given the push it needed to market cutting-edge Internet of Things technologies that let public bodies deploy automated remote building management. Customers currently successfully overcame the difficulties of manual building inspections (due to COVID-19) by using Safecility’s technology. Since finishing this project, the business has doubled in size, increased revenues, and is collaborating with major electronics manufacturers to expand the market for its products.
Germany to Hold Significant Market Share
- The building automation systems market in Germany has witnessed significant growth due to increasing infrastructure development along with rising demand for green buildings in the country.
- For instance, the German construction sector is expected to bring in sales of EUR 151 billion in 2022, up 5.5% from 2021, according to figures from the country’s two leading construction associations, ZDB and HDB. The growth projection is anticipated to be led by the strong performance of the country’s residential construction sector; according to Eurostat, Between 2008 and 2021, Germany’s index for building permits issued for residential building construction more than doubled. The index value reached 126.7 index points in 2021. This indicates that permits for building activities increased by 26.7% between 2015 and 2021, depending on the number of housing units.
- Furthermore, the federal government aims to make the country’s building stock largely climate-neutral by 2050, implying that buildings will have very limited energy needs, which will be covered by renewables. As per the plan, the building sector needs to reduce its emissions to 70-72 million tons of CO2 equivalents, which corresponds to a 66-67% reduction compared to 1990. Such initiatives are expected to propel the growth of green buildings, which, in turn, would create a demand for building automation systems owing to their efficient use of energy and minimal impact on the environment.
- Further, the major players in the region are pursuing acquisition strategies to strengthen their foothold in the market. For example, Bosch Building Technologies, a German company, planned to purchase Hoerburger AG in January 2022. Hoerburger AG is based in Bavaria, Germany, and offers a wide range of products and solutions with a particular emphasis on building automation and energy management. By doing this, the businesses hope to provide the digitalization, connectivity, and artificial intelligence that are giving them more and more opportunities to transform commercial buildings into automated, smart living and working environments that increase people’s security, safety, and comfort while ensuring greater sustainability.
- In recent years, Cube Berlin, one of the most intelligent office buildings in Europe, was established in Germany. The building was designed as a smart commercial building that enables the most efficient management and the best possible user comfort through a combination of digital building automation and artificial intelligence (AI). Building automation solutions by Kieback&Peter were leveraged to realise this objective.
