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UK FM market to hit £52bn in 2026

The UK facilities management market was valued at £47.2 billion in 2020, and it is expected to reach $71. 43 billion by 2026, equivalent to a CAGR of 1. 41% according to new research.

A report from ReportLinker asserts that the is one of the largest markets for facility management services in Europe in terms of maturity and sophistication.

In addition, given the high penetration of facility management services, several service vendors operating in the country have been focused on expanding their presence to leverage the growing demand for facility management, especially with the recent trend favouring the outsourcing of non-core operations.

The report’s executive summary says the market is highly competitive, owing to the presence of several organised players and the strong presence of top global companies, such as CBRE, JLL, and Emcor, among others.

According to a BCIS study, maintenance expenditure in the UK stands just under 3% of the country’s GDP; BCIS’s life cycle cost benchmark estimates indicate that maintenance (fabric and services maintenance and decorations) represents around 40% of total facilities management costs, including cleaning and utilities, thus, valuing the FM market at around 7.5% of the country’s GDP.

Owing to such developments in the country driven by the growing trend of outsourcing, the market is expected to see further growth over the coming years.

The report says COVID-19 has had a mixed business impact on facilities management firms, as the restrictions on the movement of people have resulted in a decline in project work and a reduced level of activity across many customer sites, adding that major players in the market, such as Mitie, CBRE Group, and others, were adversely affected due to the pandemic lockdown.

FM providers have been experiencing supply chain disruptions leading to difficulties in procuring materials and supplies. Also, they have found it harder to cope with staff shortages owing to various factors that include lockdown restrictions, self-isolation, and illness. However, the readily built environment has played an important role in supporting various industries from health and social care to transport and utilities and helped tackle the spread of the virus.

However, since the facility management industry is heavily reliant on workers from the European Union and with soft FM services are primarily dependent on this source of labor, restricted access post-Brexit can have significant implications. FM businesses, particularly those holding EU contracts, are expected to be affected by potential changes to migrant labor, the supply chain, and other regulations in the post-Brexit scenario.

Single FM Service is Expected to Witness a Significant Growth

Working with a single facility management service provider entails primarily delegating task management to separate entities. It also entails having a different service provider for each service the organization requires, such as cleaning, reception, and vending machines. Using the services of specialised service providers has several advantages, the report says.

According to The Q2 2021 RICS UK Facilities Management Survey, in Feb 2021, approximately 6% of the respondents believed that the single FM sector was going to witness the highest growth in the next 12 months.

The response rate increased in May 2021 as 10% of the respondents believed single FM to witness the highest growth. However, substantial respondents in the survey believed that other services such as bundled FM and in-house services are poised to see the highest growth rate in the next 12 months.

Global integrated FM market to hit $116.25 billion by 2026

A rise in demand for standardisation and simplification of facilities in industries and residential buildings due to the need for good working environment and reduced energy output costs are expected to positively influence the global integrated FM market, says new research.

Reportlinker expects the market to grow from $84.65 billion in 2020 to $116.25 billion by 2026, having segmented into hard services and soft services, where hard service segment held a market share of around 53% in 2020 due to rise in investments in energy and project management to achieve long-term efficiency.

Based on service, the market is segmented into building and property management, cleaning and hygiene, security and staffing, IT support and others. Among these, the market share of building and property management segment was around 26% in 2020.

The report says the increasing development of sustainable infrastructure and growing presence of many enterprises to adopt changing organisational structure and work management are the key drivers for the growth of the global FM market.

The largest contributor to demand is North America, with around 39.15% value share in 2020.

The leading players as ranked in the report are JLL Inc (Jones Lang LaSalle IP, Inc), ISS A/S (International Service System), CBRE Group Inc, Cushman & Wakefield plc, Sodexo, Compass Group plc., Aramark Corporation, Coor Service Management Holding AB, Mitie Group PLC, MacLellan Integrated Services, Inc.