Facilities Management Market - Growing Europe FM Market Looks to Demand from Manufacturing Industries

Facilities Management Market: Snapshot

Cost reduction has become imperative in almost all sectors, be it manufacturing, corporate, educational, or residential. Facilities management has emerged as the ideal tool to offer high-quality services such as cleaning, maintenance, and security at a low cost. The economic pressure that most companies have been under is owing to consistently rising maintenance and operation costs, which impacts the performance of the firm in the long run. The improvement of business activities is also dependent on the effective control of harmful gas emissions. Rising government regulations on waste management and energy have compelled organizations to turn to facilities management in a bid to improve the long-term sustainability of their businesses and the environment.

Fueled by these current and emerging trends, the global market for facilities management is expected to report a 13.6% CAGR during the forecast period. This market is expected to witness an upward growth in value from US$606.4 bn in 2015 to US$1,887 bn by 2024.

Growing Europe FM Market Looks to Demand from Manufacturing Industries

The global facilities management market comprises North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. Europe is by far the most prominent regional market for facilities management, with the opportunity to be worth US$624.9 bn by 2024. Rising from a US$219.5 bn worth in 2015, the Europe market is projected to expand at a 12.5% CAGR therein. This can be attributed to the growing demand for support and maintenance services by manufacturing industries in the region and the surging demand for a variety of technical services such as plant maintenance, fabrication, and HVAC. While the U.K. is the largest revenue generator in this regional facilities management market, Germany is expected to register the highest growth over the coming years.

Asia Pacific is poised to witness the fastest growth by 2024, clocking in a 15.5% CAGR during the forecast period. This FM market is estimated to reach a worth of U$437.1 bn by 2024, fueled by the rapid development of education and residential sectors and their demand for soft services, such as catering, mailroom, pest control, cleaning, waste management, and security. India and China are anticipated to witness flourishing growth in the facilities management market thanks to the rise in soft service and technical outsourcing in several industries.

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Corporate Sector Stands Out in Adoption of Facilities Management Services

The facilities management market caters to several end-use industries, namely government and public, manufacturing, retail and commercial, corporate, healthcare, and educational and residential. The corporate sector is the largest contributor to the overall revenue of the facilities management market and also the fastest developing industry segment, registering an impressive 15.1% CAGR from 2016 to 2024. This segment accounted for a 21.3% share in the FM market by industry in 2015, propelled by the growing need to support and maintain core services in corporate sectors such as IT and BFSI (banking, financial services, and insurance). While North America and Europe have been witnessing large-scale adoption of facilities management services in the corporate sector, the MEA and APAC regions are expected to gain traction thanks to the increasing adoption of outsourced FM services.

Facilities Management Market Size, Share Opportunity Forecast 2024

Albany, New York: The vendor landscape of the facilities management (FM) market is characterized by the presence of industry leaders Sodexo, Inc. and ISS World Services A/S. Transparency Market Research reveals that these two companies, along with Broadspectrum (Australia) Pty Limited and Bilfinger HSG Facility Management GmbH, together accounted for only 28% of the global market in 2015, indicating that there is significant scope for other service providers to strengthen their position in the FM services market. 

“Cross-border mergers and acquisitions with expanding regional coverage and customer network hold immense opportunities for FM service providers owing to the expansion of business activity across the globe,” a TMR analyst predicts.

TMR finds that an increasing number of companies have been providing bundled facilities management services – a combination of soft and hard FM services – in order to improve the efficiency of business processes and deliver quality and valued services to their clients.

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“Bundled facilities management services have proven to be extremely useful in strengthening long-term relationships between the service provider and the client,” says a TMR analyst. Several companies in the U.K., for instance Northampton-based 14forty FM Support Services and London-based G4S plc, have been dedicatedly providing a variety of bundled FM services such as security, cleaning, reception, food and hospitality, and workplace management. This has enabled an enhanced level of professional development and cross-service efficiencies of facilities management services.

On the other hand, total FM services have also gained much traction in recent years. “These single-point delivery services have successfully helped improve services and bring down overall cost,” the author of the study observes. “Companies have also found that total FM services provide central control to the entire facilities management and minimize complexities among various services.”

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Tackling Cost Issues with Facilities Management

As more and more companies aim toward reduction in maintenance and operation costs, facilities management has emerged as the ideal solution for firms in the short, medium, and long term. FM services have been supporting companies in reducing capital expenditure and increasing investments in primary services, a goal which most organizations strive for.

Energy consumption is also a major hiccup in most business activities since excessive consumption of acts as an added operating cost. By developing an integrated design for business operations, FM services held companies curb energy usage and improve overall performance.