Global facilities management in 2019 and beyond - where is it heading?

As we roll into 2019, the facilities management market remains healthy with analysts predicting its continual global growth.

One market research report estimates that its size is to grow from $34.65 Billion in 2018 to USD 59.33 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 11.4 per cent during the forecast period.

Reasons for growth include a rise in the development of sustainable infrastructure, and in the adoption of the Internet of Things and connected devices for building automation across all of the industry whether in hard or soft services.

There is also an increasing worldwide incentive to meet environmental and regulatory compliance and save more in costs but to be just as, if not more, productive.

“Unified” facilities management of America

In North America the demand for "unified facilities management services" is growing with the trend of digital technologies such as the Internet of Things, smart buildings systems, Big Data and 3D printing. According to analysts, North America has the leading market share in this area - no surprise, as it is the largest contributor to the facility management market in terms of size.

The development of the North American FM market in 2019 will also be down to an increase in the number of public-private partnership projects in the region. There are growing redevelopments in the existing facilities and rising population, which has increased the burden on the existing facilities, and this is set to gain further momentum in 2019.

Despite its current dominance of the market, the EMEA region is expected to surpass the Americas to become the largest shareholder by 2023.

Brexit uncertainty in UK

In the UK, a MTW Research report suggests that outsourcing will grow by £2 billion in 2019, with the FM market forecast to rise by more than £10 billion by 2022. 

The study is based on data from 80 per cent of the FM market and while it states that FM trends will continue to reflect sustained pricing pressure in a challenging market in 2019, growth opportunities for FM companies and suppliers remain significant. 

Based on the data the report also adds that the worth of the FM market will rise by 9 per cent by 2022, which sounds encouraging but actually reflects a slowdown from the 16 per cent growth in previous years.

Mergers and acquisitions statistics for the UK facilities services sector since Brexit, suggests that the vast majority of transactions have been exits to trade overseas versus domestic trade or private equity buy-in.

There is an underlying trend towards integrated services or total facilities services in the market which is driving this trend in the UK and other regions.  On that basis, the overseas buyers who have platforms in the UK already or who want to enter the UK market are doing so because the devaluation of sterling has made it a very cheap time for them to come in - 2019 is likely to continue to see more of this.  UK public limited FM companies have not been in the best health and more of them are divesting non-core assets - also set to continue in 2019.

Middle East and Asia gain ground

In other EMEA areas, such as the Middle East, the facilities management market is in a huge growth phase - which will continue in 2019. One report states that the market is projected to grow by about $29.9 billion during 2019-2023.

There has also been a fast rise in the construction of commercial infrastructure here in industries such as transport, hospitality, entertainment, and healthcare, which has driven more activity in the FM sector. 

Provision of soft services dominated the FM market in the Middle East in 2018. It is this segment which analysts say will increase its market share in 2019 with projections that its growth will dominate for the next five years.

The increasing demand for automation in production and manufacturing facilities has led to a demand for facility management software in the Asia Pacific region, which is growing fast within the market, as the region itself experiences changes in its own infrastructure.

Despite any political or economic challenges the facilities management market is growing steadily globally in all regions - growth that is driven by the rapid take-up of technological solutions and a more urgent focus on environmental goals.