BCIS five-year Facilities Management forecast | April 2023

Maintenance costs are expected to rise 5.7%, in the year to 4Q2023 and between 2.5% and 3.1% annually for the next four years. Overall, they’re expected to rise 17.6%, in the forecast period to 4Q2027.

Cleaning costs are forecast to rise somewhat faster due to pressures on labour costs, up to 25.6% over the forecast period. They are forecast to increase 9.0% in the year to 4Q2023. Further increases of 5.5%, 2.8%, 3.3% and 2.9% are expected in the remaining years of the forecast period.

Energy prices are extremely volatile but are expected to fall over the forecast period. They may continue to rise in the short term as previous increases work their way through to consumers. But they’re forecast to go down for the rest of the forecast period, as the markets stabilise.

Maintenance demand as measured by Construction R&M annual output is forecast to increase by around 6% over the forecast period. After falling over 3% between 2022 and 2023 it is expected to recover slowly over the next four years. We have assumed that much of the cost of the recladding of buildings in the aftermath of the Grenfell fire, as well as initiatives to tackle backlog maintenance and to cut carbon emissions will be accounted for in the R&M although some of it may be included in new work output.

Construction Inflation: 2023 – The year of stagflation? Find out here.

Restricted budgets and high demand will put pressure on the FM market

The FM market will be subject to competing pressures of restricted budgets and growing needs over the next few years. Buildings in both the public and private sectors need substantial investment. Backlog maintenance, particularly in the public sector, needs addressing and improving the environmental performance of all buildings is essential if we are to meet our climate change commitments.

FM managers must develop whole-life plans to demonstrate the long-term costs of short-term cuts to protect their budgets and the built environment.

The rising cost of living and labour shortages are prominent issues

The cost and availability of labour are anticipated to be a major barrier to the delivery of maintenance services.

Figure 1: Repair and maintenance output, maintenance, cleaning, and energy costs (output is full year on full year, costs are changed from 4Q to 4Q of the previous year)

The full five year Facilities Management forecast is available in the BCIS OpX.

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