Building Automation Market Size, Share, Forecast, & Trends Analysis by Offering (HVAC Systems, Security & Access Control Systems, Lighting Systems, Energy Management Systems), Technology (Wired, Wireless), Sector (Residential, Commercial), and Geography - Global Forecast to 2031

Building Automation Market Size & Forecast

The Building Automation Market is expected to reach $227.1 Billion by 2031, at a CAGR of 10.2% from 2024 to 2031.

The growth of this market is attributed to the increasing deployment of security & surveillance systems in commercial & residential buildings, the integration of IoT technologies into building automation systems, the increasing demand for energy-efficient buildings, and the rising number of connected devices in buildings. Moreover, the proliferation of smart cities, increasing government initiatives to enhance energy efficiency in buildings, and increasing deployment of wireless technology in building automation systems are expected to offer growth opportunities for the players operating in this market.

Building Automation Market Growth Drivers

Increasing Deployment of Security & Surveillance Systems in Commercial & Residential Buildings Supports the Growth of Building Automation Market

With advancements in technology, security systems are becoming more affordable and easier to install, making them accessible to a wider range of homeowners and builders. Modern security systems integrate with building management systems, allowing for centralized control of access control, lighting, HVAC, and other systems to improve efficiency and security. Cloud-based systems offer remote monitoring, easy scalability, and real-time data access for security management applications.

With increasing security concerns, builders and homeowners are increasingly worried about break-ins, vandalism, and overall safety, prompting them to invest in security systems. Many commercial places have regulations requiring specific security measures to protect sensitive data and ensure workplace safety.

Some of the recent developments in this market space are as follows:

• In April 2024, SAVI Controls, LLC (U.S.) partnered with Hanwha Vision (South Korea) to provide commercial audio, video, lighting, and security solutions, including IP-based cameras, video management systems, smart analytics software, and a range of accessories for commercial spaces.
• In May 2023, Gunnebo AB (Sweden) launched SpeedStile FLs MAX, an entrance control solution designed to improve access management and maintain flow in commercial buildings.

Such developments drive the demand for security solutions in residential and commercial buildings, further supporting the market’s growth.

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Integration of IoT Technologies into Building Automation Systems Drives the Growth of Building Automation Market

Building automation uses technology to control various electric, electronic, and mechanical systems throughout a building to enable efficient and economical use of resources. IoT technology is used in building automation systems to operate and monitor lighting, security, HVAC, and other building systems to reduce energy consumption. IoT technologies used in building automation include sensors, smart devices, cloud computing, artificial intelligence, and advanced data analytics. IoT sensors are used to detect potential equipment failures before they occur, allowing for preventive maintenance and minimizing downtime.

The integration of IoT technology is increasing in building automation systems to optimize energy consumption by automatically adjusting systems based on real-time needs. Thus, organizations are offering IoT-enabled building automation systems to improve energy efficiency, enhance building security, remote access and control, and reduce cost. For instance, in March 2023, Siemens AG (Germany) launched Connect Box, a smart IoT solution designed to manage small to medium-sized buildings and increase building operations efficiency, reduce energy consumption, and meet regulatory requirements for sustainable and healthy buildings. Such developments support the growth of the building automation market during the forecast period.

Building Automation Market Trends

Integration of AI in Building Automation Systems

Artificial intelligence (AI) is revolutionizing building automation systems (BAS) by introducing new levels of efficiency, optimization, and predictive capabilities. AI advances monitoring and control applications by connecting energy management systems, utility, HVAC, and security with smart, innovative technologies. AI helps to analyze vast amounts of data on energy consumption, weather patterns, and occupant behavior to allow BAS to predict energy demands and automatically adjust HVAC systems for maximum efficiency.

Organizations such as Siemens, Honeywell, and Johnson Controls are integrating AI algorithms into their cloud-based smart building management system (BMS) platforms. This helps to make actionable and predictive decisions, reduce operational costs, improve energy efficiency, and enhance occupant experience. For instance, in June 2022, Siemens AG (Germany) launched Building X, a new smart building suite with built-in cyber security and AI-enabled technology to accelerate digital transformation and value creation across industry, transportation, grids, and buildings. Such developments by market players are supporting the growth of the building automation market during the forecast period.

Building Automation Market Opportunity

Proliferation of Smart Cities Offering Growth Opportunities for Building Automation Market

A smart city is an urban area that uses emerging technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), big data, cloud, and data analytics to collect and analyze data on infrastructure utilization. Governments worldwide are undertaking initiatives to develop connected smart cities. With the rapid expansion of cities, infrastructure, and facilities, the integration of building automation systems is also increasing in the commercial, industrial, and residential sectors.

Smart cities aim to improve citizen quality of life and prioritize sustainability and building automation to achieve energy efficiency goals. Building automation systems are used to optimize HVAC, lighting, and other building systems to reduce energy consumption and contribute to the city's overall sustainability goals. BAS offers features such as personalized comfort controls, real-time energy consumption data, and improved indoor air quality contributing to a more comfortable and sustainable living environment for building occupants. Thus, the increasing demand for energy-efficient systems, rising awareness of the benefits of building automation systems, and growing government initiatives and regulations for smart cities are key factors driving the market growth.

Increasing Government Initiatives to Enhance Energy Efficiency in Buildings Offering Growth Opportunities for Building Automation Market

Governments worldwide are implementing various initiatives to promote energy-efficient buildings. Government bodies establish new standards for minimum energy performance requirements for new and existing buildings. Some governments provide grants and low-interest loans to support energy efficiency retrofits in existing buildings. By setting standards, providing financial incentives, and raising awareness, governments around the globe encourage the construction and renovation of buildings that use less energy, reduce greenhouse gas emissions, and create cost savings for building owners and occupants.

Some of the recent initiatives by government bodies are as follows:

• In March 2024, the German government announced the revision of the "Buildings Energy Act (GEG)” and obligated "Efficiency Standard 55" for new buildings by January 2023.
• In June 2023, the U.S. General Services Administration (GSA) announced a plan to invest USD 975 million in Inflation Reduction Act funding to upgrade federal buildings across the country with emerging and sustainable technologies.
• In July 2021, the Government of India announced various initiatives towards energy efficiency in the building sector.

Such developments support the growth of the building automation market during the forecast period.

Building Automation Market Analysis: Key Findings

By Offering: In 2024, the HVAC systems Segment to Dominate the Building Automation Market

Based on offering, the global building automation market is segmented into HVAC systems, security & access control systems, energy management systems, water management systems, lighting systems, fire protection systems, facility management systems, building automation system services, and other offerings. In 2024, the HVAC systems segment is expected to account for the largest share of above 30% of the global building automation market. The large market share of this segment is attributed to the increasing concerns about environmental impact, increasing urbanization, technological advancement in HVAC systems, and increasing implementation of stricter regulations by the government for air quality in commercial buildings. In July 2022, Fr. Sauter AG (Switzerland) launched IoT-capable actuators to enable autonomous or semi-autonomous control in heating, ventilation, and air conditioning systems for modernized buildings.

However, the security & access control systems segment is projected to register the highest CAGR during the forecast period. The segment's growth is attributed to the advancements in biometric technologies, increasing security concerns in the commercial sector, and increasing deployment of security solutions by building owners to protect occupants, assets, and sensitive information. In March 2023, Johnson Controls International plc (Ireland) launched IQ Pro Hybrid Security Panel, a life safety and security device for intrusion protection in commercial buildings, large residential facilities, campuses, and K-12 markets.

By Technology: In 2024, the Wired Technology Segment to Dominate the Building Automation Market

Based on technology, the global building automation market is segmented into wired technology and wireless technology. In 2024, the wired technology segment is expected to account for the largest share of above 65% of the global building automation market. The large market share of this segment is attributed to the growing demand for wired solutions for fire alarms and security control systems and changing consumer preference for stable and reliable wired standards for building automation systems. Wired connections provide significantly lower latency for applications requiring real-time data and immediate response, such as HVAC systems and building automation controls.

However, the wireless technology segment is projected to register the highest CAGR during the forecast period. The segment's growth is attributed to the increasing demand for wireless technology to reduce installation time and cost, increasing adoption of cloud-based solutions, and increasing adoption of wireless technology for various applications such as lighting, security and access control, elevator management, and energy management in buildings.

By Sector: In 2024, the Commercial Segment to Dominate the Building Automation Market

Based on sector, the global building automation market is segmented into residential, commercial, and industrial. In 2024, the commercial segment is expected to account for the largest share of above 40% of the global building automation market. The large market share of this segment is attributed to the increasing government implementation of stricter regulations on energy efficiency in commercial buildings, advancements in sensor technology, cloud computing, and the Internet of Things (IoT), increasing building automation for cost savings and improve operational efficiency to enhance tenant satisfaction, and increasing use of biometric technology for security and access controls in commercial buildings. In April  2023, 75F, Inc. (U.S.) launched a new range of innovative products and solutions to improve building efficiency, enhance indoor air quality, and reduce operating costs in commercial buildings.

However, the residential segment is projected to register the highest CAGR during the forecast period. The segment's growth is attributed to the rising sense of home safety & security, the growing need for IoT security solutions in the residential sector, the increasing popularity of smart devices, and changing consumer preference for a convenient and comfortable living experience. In March 2024, Hangzhou Hikvision Digital Technology Co., Ltd. (China) partnered with Can'nX (France) to integrate AI-enabled devices, such as cameras, into building systems and offer automation solutions for commercial and residential buildings.

Geographical Analysis

In 2024, the North America Region to Dominate the Building Automation Market

In 2024, North America is expected to account for the largest share of above 35% of the global building automation market. The market growth in North America is driven by the higher adoption rate for advanced technologies, the presence of established players in the region, the increasing adoption of smart devices for commercial and residential applications, and the increasing adoption of energy-efficient solutions for building management. North America is focusing on reducing its carbon footprint and building automation helps to optimize energy consumption. Government bodies in the region have implemented stricter regulations on energy efficiency in buildings. Market players are also focusing on offering automation solutions for energy efficiency and security applications. For instance, in April 2024, Johnson Controls International plc (Ireland) launched a Security Operations Centers (SOC) service in the North American market to create safer and more productive environments for commercial buildings.

However, Asia-Pacific is projected to record the highest CAGR of above 12% during the forecast period. The region’s growth is attributed to the surge in government initiatives to promote energy-efficient building systems, an increasing number of smart city projects, and increasing government investments in public infrastructure. The region is experiencing rapid urbanization, with a surge in new buildings opening new opportunities for integrating building automation systems. With a growing population and rising energy demands, government bodies across the region are prioritizing energy-efficient buildings.

Building Automation Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the building automation market are Siemens AG (Germany), Honeywell International Inc. (U.S.), ABB Ltd. (Switzerland), Schneider Electric SE (France), Johnson Controls International plc (Ireland), Cisco Systems, Inc. (U.S.), Huawei Technologies Co., Ltd. (China), Robert Bosch GmbH (Germany), Legrand (France), Delta Electronics, Inc. (Taiwan), Hubbell Incorporated (U.S.), Trane Technologies plc (Ireland), Lutron Electronics Co., Inc (U.S.), Mitsubishi Electric Corporation (Japan), and Crestron Electronics, Inc. (U.S.).

Building Automation Industry Overview: Latest Developments from Key Industry Players

• In September  2023, BrainBox AI (Canada) collaborated with Trane Technologies plc (Ireland) to offer building automation solutions with AI technology to reduce greenhouse gas emissions (GHG) emissions and operational cost savings.

• In October 2022, Tata Power Trading Company Limited (India) signed an agreement with 75F, Inc. (U.S.) to promote building automation and energy-efficiency solutions in the commercial building space and industry verticals such as IT, BFSI, hospitality, healthcare, education, government, and retail.

• In June 2022, Johnson Controls International plc (Ireland) collaborated with Accenture PLC (Ireland) to operate two new OpenBlue Innovation Centers and offer building control system products and services using technologies such as artificial intelligence (AI), digital twins, internet of things (IoT), 5G, and the cloud. The collaboration aimed to accelerate advanced automation in building operations to achieve greater sustainability, safety, security, and user experiences.

Building Automation Market Research Summary:

Key questions answered in the building automation market report: