Demand for R&M could fall as maintenance and cleaning costs look set to rise – © iStock
The facilities management market will face difficulty over the next two years, as labour availability and high inflation drive an increase in costs, according to a market forecast.
The Building Cost Information Service's market forecast states that maintenance and cleaning costs are to rise by 4.8% and 7.7% respectively this year – the latest predictions indicate that repairs and maintenance annual output could decline by around 2.9% in 2023, and general inflation, as measured by the Retail Prices Index (RPI), is expected to fall to 7.0%, by the end of the year.
The cost-of-living crisis and increase in wages because labour shortages could result in maintenance costs rising to 15.4% over the forecast period (to 3Q 2027). As companies adapt to post-Covid standards, cleaning costs are expected to rise 28.5% over the next five years.
Although energy prices remain volatile, energy costs are expected to decrease by 24.4% in the forecast period, as the markets stabilise.
Basic repairs and maintenance cannot be cancelled or postponed, but some R&M expenditure in the public sector may be held back, as new-build projects under the major hospital, school and prison building programmes are prioritised.
Stimulating the industry
But a new series of initiatives to tackle the energy price crisis and fulfil the government’s decarbonisation policy could help to spur growth. Pressure from the central government to continue removing and replacing unsafe cladding will also help to stimulate the industry. Government statistics on the Building Safety Programme show that 95% of all identified high-rise residential and publicly owned buildings in England have either completed or started remediation work, but this work is likely to continue into 2023 or beyond.
Spiralling inflation and availability of labour are currently the key drivers for cleaning costs. If not addressed, severe staff shortages in the sector could compromise its ability to deliver. According to a British Cleaning Council and All-Party Parliament Group (APPG) report, 21% of cleaning industry employees are immigrants. The group suggests that the government should give urgent consideration to ensuring cleaning staff are eligible for the Skilled Worker Visa scheme.
The full five-year Facilities Management forecast is available in the BCIS Building Running Costs online service.
