The 140 page report forecasts more than £450 million growth for the contract cleaning market in the next few years, with longer term optimism strengthening after a challenging period of trading in 2018. Despite recent political turmoil and media clamour, MTW forecast a ‘relatively slow and soft Brexit, through one over-arching ‘deal’ and/or a number of temporary bilateral deals with the EU’ offering reasonably stability and some certainty for contract cleaners and associated suppliers.
The 2019 Public Spending Review will also provide a much welcome boost for the contract cleaning market, with budget growth in Education, Health and Transport / Infrastructure forecast for the next 5 years. Discussing this issue, MTW Research Director Mark Waddy said:
“The contract cleaning market is likely to shift toward a more balanced level of exposure between public and private end use sectors from 2020, following several years of over-reliance on the private sector for growth.”
Based on company sales of more than £3 billion, the report provides end use sector shares in 2019 finding that domestic tourism and leisure sectors continue to outperform the market. The recent rapid growth in private health care facilities is slowing, though health spending on cleaning services is set to rise by around £35 million in 2019, according to MTW.
More specialised cleaning services continue to grow sales in 2019, with the report identifying a wide range of opportunities for value growth in what has become an increasingly competitive market in recent years. Around 80% of cleaning contractors continue to report healthy financials, though the number of businesses at risk of failing has risen in the last 12 months.
Growth in shared workspaces is one example identified as boosting contract cleaning sales in 2019. According to MTW, shared office space workers are more than twice as likely to contract a virus than private office workers in 2019. This has driven demand for more effective and additional infection and hygiene control solutions, with enhanced ‘data driven cleaning’ also representing a key tactic in the market used to add differentiation by cleaners and associated equipment suppliers and boost productivity. IoT connected devices, 5G and software developments continue to drive innovation in contract cleaning in 2019, with MTW identifying a range of factors boosting growth in the next few years.
“It’s reassuring to see that ‘enhanced ‘data driven cleaning’ will be a key tactic to differentiate cleaning service offerings. The companies embracing digital are already challenging the traditional facilities management business models. This rings true for us as we see an upturn in demand for our workforce management technology in this sector. We can predict that at least 40 per cent of businesses in this market will die in the next 10 years if they don’t figure out how to embrace new technologies.”
Even the smallest cleaning company, which may feel that in-depth analytics are not needed, can benefit from reduced paperwork, and the ability to run finances and cleaning contracts digitally.
The cleaning market is set to grow exponentially, and we have no doubt that further technological advances will be developed to disrupt and transform the sector.
The contract cleaning market continues to experience severe pricing pressure at the lower value end of the market and this has continued to sustain pressure on margins, with the report tracking declining industry profitability since 2013. The minimum wage has increased by 24% in the last 6 years whilst sales per employee in contract cleaning has risen by just 5% in comparison, according to the research.
MTW points to an increasingly polarised contract cleaning market in 2019, highlighting a clear need for companies to identify and address the ongoing fundamental market shift and avoid the rising number of pitfalls at present. The report is available here.
Ezitracker technology enables employers of large and small workforces such as cleaners and maintenance workers to reduce absenteeism, lower costs via automation, and increase productivity and efficiencies.