The report states that strategic FM contracts are likely to offer reasonable opportunities .


FM contractors are weathering well the double-dip recession with sales remaining steady, though pressure on margins and budgets is hampering market growth.

Publicado por FAMASE el 16/07/2012 (ENG)


While there was a slowdown in growth in 2011 and early 2012, market performance continues to be underpinned by longer term contracts, according to the Facilities Market in 2012 report from MTW Research.

The report, based on financial data from more than 60 per cent of the FM market by value, notes the growing role of “strategic integrated FM” as a key tactic for enhancing margin opportunities. FM providers seek to offer services which “fit” the client’s strategic direction as well as support day to day operational needs.

The report states that strategic FM contracts are likely to offer reasonable opportunities for growth in the second half of 2012 and beyond. FM suppliers are seeking to develop a new depth of knowledge and expertise across a wider range of issues, ranging from clients’ environmental policies, working practices, future growth directions etc. 

But the government is only one quarter through their deficit reduction programme and public spending has only reduced by around 2% per cent so far.

The report indicates that more severe public sector cuts are yet to be felt by the FM industry, though the forecasts suggest that whilst there may be a growing pressure on prices, the need for the public sector to continue to divest risk and seek to reduce costs through outsourcing should underpin this sector in terms of market value.

Additionally, the recent announcement of an additional £2 billion of private finance initiative (PFI) spending on new schools in the next two years and real term growth in spending on health is offering some moderate optimism for FM contractors active in these sectors. 

Lacklustre demand patterns from the private sector have continued to dampen FM market growth in the last 12-18 months, and the report highlights the fact that around 45 per cent of single-service FM providers reported either declining or static sales in the lpst 12 months. Conditions are clearly tough at present for smaller companies who are less able to differentiate and are experiencing an increasing squeeze on margins as a result of pricing pressure.

However, larger, multi-service FM providers are growing share of the FM market in 2012, with these companies generally reporting more favourable trading conditions as a result of their ability to offer a wider range of services at competitive prices.

Despite this polarisation in terms of performance between single and multi-service providers, the research found that 90 per cent of FM contractors still have either a “fair” to “excellent” credit rating. Liquidity and stability continue to characterise the UK facilities management market. MTW suggests that the “total facilities management” market is driving growth with this sector continuing to change in 2012. Acquisitions and consolidation are likely to become increasingly evident as companies seek greater economies of scale in their operations and procurement.

Further, indications are that further international integration and market development is also likely to occur as FM providers seek to capitalise on economies of scale on a cross border basis, rather than focus on one particular geographical market. 

The report, which also offers forecasts to 2016, is available to purchase on MTW Research’s website

Published in FMWORLDLink


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