A new report on the UK Facilities Management market from MTW Research suggests that optimism is strengthening in 2013, following a steadily improving trading environment in 2012, though growth remains fragile for many FM providers Based on financials from 60% of the FM market, the research found that despite the economy contracting at the end of 2012, the market continues to offer a number of opportunities for growth in 2013, primarily centred around enhancing core service levels and adding value through differentiation. Commenting on the research, MTW pointed to a "growing polarisation of the ‘haves and have nots’, with 50% of FM providers reporting no growth in the last 12 months reflecting a large number of
companies still reliant on organic volume growth…which remains somewhat elusive in 2013."
With value, rather than volume growth being the key watchword in the UK facilities management market in 2013, the research found that FM providers are currently finding success through the use of tactics such as more closely matching service provision to the client’s corporate aims, objectives and culture. This ‘strategic integration’ offers good opportunities for value growth in the near to medium term according to MTW, offering some relief to the lack of real term growth in contract prices. Whilst multi-service FM has grown share to more than 30% of the UK FM market in 2013, research for the report also uncovered an apparent growing level of disillusionment with some ‘bundled FM’ service providers. This appears to be a growing trend in the FM industry with clients increasingly suggesting that some multi-service providers are unable to live up to expectations in terms of providing better value for money or level of service than single service providers. MTW point to clients having indicated that in some cases, they are more often able to achieve better service levels at similar contract prices through the procurement of single service contracts. The report also discusses an apparent growing preference for single service providers boosted by the perception of a greater ‘leverage’ a client may have over a smaller FM provider.
The report forecasts performance of the facilities management market to 2017 split by key application with the private sector set to lead growth in the medium term. Discussing the share between private and public demand, MTW suggest that, “…The government is less than 10% through their budget deficit programme with more than £100 billion of public spending being removed from the economy before 2015. Whilst this is unlikely to result in a significant contraction in FM public sector expenditure, it will almost certainly limit any real term growth in the medium term.”
MTW’s report discusses a wide range of strengths and weaknesses in the UK FM market in 2013 and identifies a number of key opportunities which should stimulate FM value growth in the near term whilst volume demand remains flat. One such opportunity identified is the provision of energy management services with an integrated approach to energy procurement, management & efficiency integrated within a corporate environmental policy offering healthy opportunities in 2013. Move management services are also mooted by MTW to hold significant potential for growth in the medium term, particularly as the commercial property market returns to stronger growth.
The report provides a comprehensive review of the UK FM market in 2013, forecasts to 2017 with product and end use sector shares alongside 4 year financial analysis for the key FM contractors. The report is available to purchase by calling +44 (0)8456 524324.