Demand for R&M could fall as costs look set to rise

by Herpreet Kaur Grewal

The FM service market will continue to face difficulty over the next two years, as labour availability and high inflation drive an increase in costs, according to a market forecast.

The Building Cost Information Service’s market forecast states that maintenance and cleaning costs are to rise by 4.8% and 7.7% respectively this year – the latest predictions indicate that repairs and maintenance annual output could decline by around 2.9% in 2023, and general inflation, as measured by the Retail Price Index (RPI), is expected to fall to 7.0% by the end of the year.

The cost-of-living crisis and increase in wages because labour shortages could result in maintenance costs rising to 15.4% over the forecast period (to 3Q 2027). As companies adapt to post-Covid standards, cleaning costs are expected to rise 28.5% over the next five years.

Although energy prices remain volatile, energy costs are expected to decrease by 24.4% in the forecast period, as the markets stabilise.

Basic repairs and maintenance cannot be cancelled or postponed, but some R&M expenditure in the public sector may be held back, as new-build projects under the major hospital, school and prison building programmes are prioritised.

The full five-year facilities management forecast is available in the BCIS Building Running Costs online service.

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