FM Outsourcing to Outperform the UK Economy

Facilities service outsourcing is forecasted to outperform the UK economy in 2020 even in the face of a global pandemic.

Published by MTW Research, the report predicts that 85% of facilities management contractors are demonstrating healthy financial performance despite the disruption caused by COVID-19.

Published in September 2020, the Facilities Management Outsourcing Market Report, which is based on data from 80% of the FM market, highlights a quicker than expected return to pre-COVID sales, with up to 10% sales increases for many leaders in the space.

Guy Pakenham, Managing Director of Cordant Services explains: “This research showcases the strength of the sector, and its ability to thrive during such unprecedented times.

“Cordant Services has seen a 12% increase in revenue this year, much of which has come as a result of the market's response to COVID-19 and an increased focus on health and safety.”

In their report, MTW alludes to the resilience of bundled service providers in early 2020. As the sector's net worth plunged by more than 60%, borrowing rose to £5 billion, and industry liabilities accounted for 46% of total FM market sales.

Yet, as a result of the rapid changes in market demand, likely due to coronavirus, profitability is now set to rise by 24% as we reach the end of the year, making bundled-services the best performing of all outsourced solutions.

Guy adds: “We’ve seen first hand how critical the need for quick response has been. The sector has adapted, and with it, opportunities have presented themselves. For those FM businesses with the foundations, resources and provisions to respond this has been a bittersweet opportunity to prove capability and tenacity.

“The pandemic has been a reality check. Our cleaning specifications in particular needed to evolve in response to the pandemic. It’s therefore been reassuring to see our business remain financially, contractually and operationally strong”.

The report also identifies longer-term trends

  • Contract cleaning, security and integrated facilities management are likely to experience 16% growth over the next 4 years.
  • Health, education and retail FM outsourcing reached a total value of over £33 billion in 2020.
  • With sales increasing by 40% technology and communications are the best performing sectors.
[Source: MTW Research]

You can read more about our COVID response in our Cleaning Division here.