BCIS forecasts for the FM sector - 4Q21

According to the BCIS Facilities Management forecast (2021-2026) facilities management costs (maintenance, cleaning and energy) will continue to be volatile as the economy adjusts to the waves of Covid.

In the short-term costs will rise but are expected to settle down in the medium term.

Over the forecast period (3Q2021 to 3Q2026):

• Maintenance costs will rise 15.5%: annual inflation of 3.2% in the year to 3Q2022, falling slightly in the following year and settling at around 3% in each of the following three years, mainly reflecting wage rises
• Cleaning costs will rise 24%: there will be demand pressures as workplaces open up and pressure on wages from demand and the National Living Wage (NLW). Costs are expected to rise 6.4% and 5.4% in the first two years of the forecast slowing to around 3% per annum thereafter.
• Energy costs are currently very volatile and have been rising sharply, they are expected to rise by 17% over the forecast period, with large rises in oil and gas prices in in the year to 3Q2022 followed by modest increases over the rest of the period as the markets stabilise.
• R&M annual output is expected to grow just over 3% from 2021 to 2026. It will rise nearly 9% between 2021 and 2022 as pent-up demand and alterations required by a new working environment push up demand. Output will decline slightly over the rest of the forecast period. The recladding of flats following the Grenfell fire and work to reduce the carbon emissions from housing will be included in the R&M output figures; an allowance for this has been included in the forecast.

These BCIS Facilities Management forecasts are based on information available up to 20 November 2021.