BEMS market performance in Q1 2025 indicates promising future

Illustrating the increased focus on sustainability and utilising technology to reduce energy consumption, the building energy management systems (BEMS) market saw an 8.4% quarter-on-quarter increase in Q1 2025 – as revealed by the Building Controls Industry Association’s (BCIA) latest market report.

While the construction industry’s skills shortage and the ongoing cost of living crisis has seen a slight decline in output, the BEMS sector, is bucking that trend, thanks to continuous advancements in technology and a surge in demand for energy efficient systems and smart buildings.

BCIA President, Stacey Lucas, suggested more environmentally conscious building owners and a need to meet sustainability and energy efficiency targets was behind the quarter-on-quarter increase. She said: “It’s been a very encouraging start to the year for the BEMS sector, with demand for smart buildings and a heightened focus on sustainability leading to a substantial increase in the first quarter of 2025.

“The rest of the year looks to be a hugely important one, especially with more building regulations and standards set to increase the significance of technology and energy efficient systems. So, the BEMS industry will continue to be prominent and a vital tool for building owners and property developers looking to reduce their carbon footprint.”

Released every three months, the BCIA’s Market Information Service (MIS) report delves deep into the data, breaking down the BEMS market into three key areas: product, installation value added, and service and maintenance.

In a significant upturn from Q4 2024, 2025’s first quarter saw product revenue rise by 11.7% up to £44.4 million. However, performance across supply routes was mixed. While sales via system installers increased by 15.9%, the value of products included in manufacturers’ own systems recorded a 3.4% decline. Rather positively, the product market edged up by 0.9% to £163.3 million on a rolling year basis, suggesting increased demand for energy efficient and smarter building systems.

Although the value added through engineering, commissioning, and installation fell by 2.4%, the rolling year figure still stood at an impressive £464.7 million. This was no doubt influenced by the substantial 16.1% increase in the quarter-to-quarter numbers – reaching £124.7 million.

Part of this was down to the value added by systems installers and others rising sharply in Q1 2025, up to 22.2%. Similarly, the proportion of value attributed to value-added services within total installed systems increased to 77.3% - a climb of 0.75 percentage points on the previous quarter. Conversely, the manufacturers’ contribution saw a fairly large drop of 12% between Q4 2024 and Q1 2025.

The report also revealed interesting data surrounding revenue from installed systems, with Q1 2025 seeing a huge 15% increase up to £161.2 million. This was supported by strong growth in the system installer channel, rising 22.7% to £108.7 million. However, it wasn’t all good news, with manufacturer-delivered systems falling 10.6% to £20.4 million. Additionally, the rolling year figure for installed systems remained slightly lower than Q1 2024’s level – down by 2.5%.

While product revenue and installation value performed well in Q1, service and maintenance activity declined, falling by 8.6% to £49 million. Furthermore, the rolling year total also saw a drop – down by 6.1%. Despite the quarterly dip, heavily influenced by manufacturers and system installers witnessing a drop in activity, service and maintenance continues to offer a resilient revenue stream for many businesses across the UK, particularly where long-term contracts or energy efficiency initiatives are in place.

Stacey continued: “Despite the challenges the sector, and the construction industry as a whole, are facing, the BEMS market continues to perform well. The BCIA is working with industry leaders and policy makers to support its members and increase understanding of the need to utilise technology, such as building automation, to ensure a greener and brighter future for the built environment.”

Produced and provided to BCIA members every quarter, the MIS report offers comprehensive insights into market trends and growth across the BEMS market and enabling a detailed understanding of the market, making it a hugely useful and informative resource. As a result, members are able to track developments, navigate challenges with more confidence and knowledge, and recognise potential growth opportunities.

With the Q1 2025 results indicating an ever-increasing understanding and appreciation of the need to embrace technology and utilise it to reduce carbon footprints, there is no doubt the BEMS market will have a hugely important role to play in improving energy efficiency across the built environment in the coming months and years.