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FM market worth £115bn in 2007

17 January 2008

MBD’s Market Review in 2007, calculates that the UK potential market for facilities management which includes services carried out in-house, contracted-out service and total facilities management (TFM) increased by 4% to a peak level of £115 billion.

Prior to that, annual growth rates fluctuated between 4% and 6% in the four years to 2006. During the review period as a whole, the market is believed to have increased by a cumulative 18%. During recent years the FM market has been stimulated in particular by increased levels of PPP and PFI projects, the governments ‘Best Value’ initiative along with the Building Schools for the Future programme.

By 2012, the potential UK market for facilities management is projected to reach £129.9bn (at 2007 prices). This is equivalent to overall real term growth of 13% compared with 2007. Annual rates of increase are anticipated to oscillate between 2% and 3%. Projected growth reflects a number of factors that are expected to continue to boost the FM market during the forecast period, including further growth in PPP and PFI activity, the Building Schools for the Future programme and the continuing trend of out-sourcing non-core activities.

MBD believe that the UK market for TFM will reach £10.5bn in 2012 (at 2007 prices), equivalent to a real term increase of 19% compared with 2007. Nonetheless, the proportional importance of the sector is expected to remain at 8% of the total potential UK market for FM throughout the forecast period.

The contracted out sector is expected to demonstrate year on year growth in the five years to 2012, reaching £79bn (at 2007 prices) in the latter year. Overall growth of 16% is projected during the forecast period. Furthermore, the proportional importance of the sector is anticipated to increase from 59% in 2007 to 61% in 2012. Growth is believed to largely reflect companies’ continuing focus on their core activities and outsourcing much of the other FM functions in order to reduce costs and acquire expertise, that they would otherwise be unable to attain. The service sectors which are expected to show the strongest growth potential over the next five years include building fabric maintenance, telecommunications FM services (in
particular call centres), environment management (due to increased regulation) and property
management.

The value of the internal sector is expected to increase by between 1% and 2% in real terms
during the forecast period culminating in an overall increase of 7% to £40.6 billion in 2012 (at
2007 prices).

The report is priced at £600 for a single copy. Copies can be ordered online at www.mbdltd.co.uk



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