The industry report draws these market conclusions after reviewing industry contracts over the period 2008-2012.
Market Forecast 2013-2017
The continued trend towards outsourcing is expected to ensure future growth opportunities for facilities management companies, with bundled services and integrated solutions, in particular showing the strongest growth potential. However, increased price competition, and with clients adopting a “more for less” attitude, can be expected to restrict a stronger value development.
In the public sector, spending cuts will afford further opportunities, though price competition is expected to remain intense, but the report authors also believe there is a changing culture in a number of public sector bodies towards contracting out services.
17% growth predicted for TFM sector
The TFM (total facilities management) sector is anticipated to demonstrate growth throughout the forecast period, with annual growth levels anticipated to fluctuate between 2% and 4% in real terms. Projected growth is partly a reflection of FM companies adopting a more partnership-based approach and providing more tailor-made services, whereas in the past TFM contracts were often seen as being too inflexible. Overall growth between 2012 and 2017 is projected to be 17% in real terms.
Contracted out services sector: 9% increase predicted between 2012 and 2017
Demand for contracted out services is also expected to increase throughout the forecast period, but with slightly weaker annual growth levels of between 1% and 2% anticipated. Overall the value of sector is expected to increase by a cumulative 9% between 2012 and 2017. The proportional importance of the sector is therefore expected to marginally weaken.
Anticipated growth is partly attributable to the continued trend towards outsourcing of non-core activities, and the trend towards bundled services contracts and integrated facilities management solutions. In the public sector, bundled services contracts could also benefit from public spending cuts, as public sector clients are looking to reduce the number of suppliers and cut costs. The service sectors which are expected to demonstrate the strongest growth potential over the next five years include building fabric maintenance, environment and efficiency management (due to increased regulation) and property management.
The “UK Facilities Management Market Development Report” published by B2B market research firm Market & Customer Insight (MCi) is available to purchase.