Economic pressures are likely to see a fall in total repairs and maintenance demand this year

The current economic situation, with inflation coming down slower than expected and interest rates rising means that the FM market will be subject to “restricted budgets”, according to the BCIS Building Running Costs Online service five-year Facilities Management forecast.

The forecast also stated that buildings in both the public and private sector need “substantial investment”, and added that these pressures are likely to see a fall in total repairs and maintenance demand this year, followed by a small increase next year. Slow but steady growth is expected for the remainder of the forecast period (to 1Q 2028).

Backlog maintenance, particularly in the public sector, needs addressing. Improving the environmental performance of all buildings is also “essential if we’re to meet our climate change commitments and changing regulations,” said the BCIS forecast.

FM managers will need to fight hard to maintain their budgets and develop whole life plans – to demonstrate the long-term costs of cutting back – to protect the built environment.

Costs for all FM services will be affected by rising labour costs and a reduced labour pool. Sourcing the right people (particularly skilled craft workers) is becoming increasingly difficult and will be a key challenge over the next few years.

Maintenance costs will rise nearly 20 per cent in the forecast period (1Q 2023 to 1Q 2028).

Costs – which rose 7 per cent in the year to 1Q 2023 – are expected to rise 6 per cent, and 4 per cent in the following two years.

Over the remaining forecast period, to 1Q 2028, costs are forecast to increase less than 3 per cent per annum.

Cleaning costs will rise 28 per cent over the forecast period: labour shortages and the rising cost of living will put pressures on wages.

Costs rose 8.3 per cent in the year to 1Q 2023 and are forecast to increase nearly 10 per cent in the year to 1Q 2024 and 6 per cent in 2025. These will be followed by annual increases above 3 per cent for the rest of the forecast period.

Energy prices are extremely volatile but are expected to fall by over 60 per cent in the forecast period: prices rose to 77 per cent in the year to 1Q 2023. It is anticipated that energy prices will fall for the rest of the forecast period, as the markets stabilise.

Construction repairs and maintenance annual output is forecast to increase by around 8 per cent over the forecast period: it is anticipated to stagnate over the next couple of years – falling slightly ( -0.7 %) in 2023 and rising slightly (+0.1%) in 2024.

The BCIS’ forecast concluded: “We’re expecting consistent growth for the rest of the forecast period. We have assumed that some of the cost of the recladding of buildings in the aftermath of the Grenfell fire – as well as initiatives to tackle backlog maintenance and to cut carbon emissions – will be accounted for in the repairs and maintenance output numbers and provision has been made for this in the forecast.”