BCIS facilities management forecast | 2022-2027

The facilities management market will be affected by the difficulties in the UK economy over the next couple of years.

A recession and double-digit inflation will affect both demand and costs.

Maintenance

Maintenance demand, which has grown in 2021 and 2022 is expected to decline over the remainder of the forecast period (to 2Q2027).

Maintenance and cleaning costs will be driven by higher wages in the short term and energy prices will be subject to global forces.

In the year to 2Q2022, maintenance costs increased by 7% driven by a 15% increase in materials costs.

While sourcing materials will continue to be a challenge, rising labour costs will be the major influence over the next couple of years.

Maintenance costs are forecast to rise by 22% during the forecast period: nearly 8% next year, 4% in the year to 2Q2024 and 3% per annum or less over the remainder of the forecast period.

Demand for maintenance, as measured by repair and maintenance construction output, recovered in 2021 from the drops observed during the lockdown.

Output

Output grew in all sectors in the first half of 2022.

Demand as measured by R&M annual output is forecast to grow 6.5% between 2021 and 2022 as a result of a combination of unmet demand and changes necessary to adapt to a new working environment.

The recladding of flats in the aftermath of the Grenfell fire, and initiatives to cut carbon emissions will keep demand at this historically high level for the remainder of the forecast period.

Cleaning

The cleaning sector was severely affected by the Covid outbreak.

With people working from home in 2020-2021, demand for commercial building cleaning declined while demand for in depth and specialised cleaning of retail and other public spaces increased.

With the relaxation of the Covid restrictions, demand for regular cleaning will expand.

As new facilities open up, the requirement for regular in depth cleaning is likely to continue.

Cleaning costs are forecast to rise 27% over the next five years, with strong demand and pressure on costs pushing up the prices.

Labour

Labour shortages and increases in wages saw costs rise by 7.5% in the year to 2Q2022.

The annual cost inflation is forecast at over 5% until the last year of the forecast.

Energy

*Please note that the forecast was undertaken before the latest UK government announcement regarding energy prices.

Energy prices are currently very volatile, they have been rising rapidly in the past months, but are expected to fall back as the world markets stabilise.

They are expected to grow by 11% over the forecast period.

Mainly driven by significant increases in oil and gas prices through to the end of 2Q2023.

However, as the current global markets steady, it is expected that energy prices will decline.

*Note the forecast was based on information available on 5^th September 2022.

Summary of BCIS Facilities Management Forecasts

Annual percentage change – Repair and maintenance output, maintenance, cleaning, and energy costs (output is full year on full year, costs are change 2Q to 2Q of previous year)

The BCIS Facilities Management forecasts for Maintenance, cleaning and energy costs and maintenance demand are published in the Briefing Section of BCIS OpX. The forecasts of the individual indices can be found in the Index Section.