IHS: Latin American video surveillance market to decline in 2015

According to a new report from IHS, an economic downtown combined with exchange rate volatility are making business conditions tough for video surveillance equipment vendors in a number of different Latin American countries and, as a result, the research firm is projecting the market will decline by 7.7 percent to $580 million in 2015.

In a research note, Jon Cropley, principle analyst for video surveillance equipment at IHS, said the economy of Brazil, which is the largest market in the region, has been suffering as lower demand from China has led to plunging commodity prices and subsequently a shrinking market for commodity exports. At the same time, the average exchange rate of the Brazilian Real was almost 37 percent lower versus the U.S. dollar in the first 10 months of 2015 than it was in 2014. 

Brazil is not alone, however, as the average exchange rate of most currencies in Latin America have also fallen sharply against the dollar. Even Mexico, which is enjoying comparatively good economic performance, has seen its currency slide. 

According to Cropley, most video surveillance equipment sold in Latin America is imported by overseas vendors rather than manufactured in the region. Even if these vendors have managed to grow their revenues in Latin American currencies, their revenues have often declined once converted back into their home currencies. IHS estimates that just two of the top fifteen vendors of video surveillance equipment in Latin America in 2014 were headquartered in the region.  

The future still looks promising for the region though and IHS forecasts that the market will grow by over 10 percent in 2016. However, Cropley said exchange rates could have a big effect again and their role in the market should not be underestimated.