Facilities Management - UK - October 2015
“The facilities management industry has grown strongly both in times of recession and economic growth. The development of the market has continued in the public and private sectors, which are now demonstrating key differences in growth. However, the contracting out of non-core activities continues and generally realises greater benefits than perceived at the time of commissioning.”
– Terry Leggett, Senior B2B Analyst
This report answers the following key questions:
- What effect will increases in the minimum wage have on the facilities management sector?
- How is public sector demand for facilities management being affected by reduced public sector expenditure and legislative changes?
- Will the industry continue its rapid development?
- Will growth in total facilities management contracts grow ahead of single or other multiple service bundles over the next five years?
- What sectors are likely to generate the greatest demand for facilities management services in the next few years?
Demand for actual facilities management continued to expand in the recession, driven primarily by the private sector looking to improve efficiency and productivity in difficult times, and the then buoyancy of the public sector. As the recession developed into flat economic conditions, the facilities management sector continued to achieve modest growth, with the private sector continuing to strive for greater productivity and efficiency, while the public sector started to be placed under intense spending restrictions. As the economy has moved to growth, the political agenda has continued to restrict public spending, while the private sector has developed.
However, alongside the total facilities management market, the industry is also involved in a more restricted set of individual contracts, which means it can be expanded to include other contracted-out services. There also remains considerable further potential in the services that are still undertaken in-house.
For the purpose of this report, the potential facilities management market includes work that is contracted to third parties, including total facilities management (TFM) contracts, and the value of projects undertaken in-house.
The market is segmented into the following sectors:
- TFM where the full responsibility for undertaking and organising facilities management services is contracted to a third-party company, which undertakes the work or sub-contracts the work to other companies
- contracted out projects where ancillary services are contracted out to third-party companies on an individual contract basis. This allows the client company to retain strategic control over facilities management and budgeting. The value for contracted out services stated in this report includes contracts by single service providers and facilities management companies
- in-house projects where ancillary services are undertaken by in-house staff. These non-core activities represent the remainder of the potential market for facilities management companies
The value of the market includes manpower costs, operational management, and strategic management, including services, consultancy and training.
The sector includes a broad range of ancillary services provided by single service contractors and facilities management companies. These can be split into soft facilities management and hard facilities management services. The former group include activities that support the operation of a facility, such as:
- security services
- cleaning services
- catering services
- postal services
- secretarial services
Hard facilities management services refer to activities that support the maintenance of a facility, such as:
- gardening and landscaping
- building fabric maintenance
- lift and escalator maintenance
- building design
- plant replacement
- construction management
- energy and environmental management
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