The FM industry has largely recovered from the economic downturn brought about by the lockdowns and is coming to terms with the new working environment, according to the latest forecast by the Building Cost Information Service (BCIS) from RICS. However the forecast warns there may be labour shortages to come.
Where workplaces are shut, essential maintenance will still be required, but overall, the amount of maintenance work being done will be reduced. Once workplaces open again, labour costs could go up because of the backlog of work and staff shortages, but could well fall in the longer term as more staff become available.
Demand for cleaning is likely to increase over the forecast period, there will be deep cleaning work as businesses open and staff return to work. In the longer-term requirements for cleaning are likely to be increased.
Over the forecast period (1Q 2020 to 1Q 2026):
- Maintenance costs will rise 14 per cent, mainly reflecting wage rises.
- Cleaning costs will rise 18 per cent: 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 2 per cent in 2021 and by around 4 per cent per annum for the remainder of the forecast.
- Energy costs are expected to rise by 19 per cent, driven mainly by the underlying movement in fossil fuels used in electricity generation.
- R&M output is expected to grow just under 13 per cent from 2020 to 2026. It will recover in 2021 and 2022 as pent up demand and alteration required by a new working environment push up demand. Output will decline slightly over the rest of the forecast period.
For more details on the BCIS click here: