2018 Report On The Building Service Contractor Market
Contracting Profits and Building Service Contractors Association International (BSCAI) surveyed building service contractors to create industry averages for product purchasing, market share and service offerings, as well as gauge the current business conditions. In addition, these questions help determine key issues that keep contractors awake at night.
Contract cleaning continues to experience optimism and growth. Profits in 2017 were higher than 2016 for nearly 70 percent of respondents. BSCs are expecting profits to increase again with three-quarters of contractors saying business conditions will improve in the next 12 months. Additionally, 82 percent of BSCs expect higher profits in 2018.
Commercial office buildings remain the biggest market for BSCs. Not surprisingly, healthcare remains the second largest market. Aging Baby Boomers has increased the demand for urgent care centers, walk-in clinics and other outpatient facilities — all of which are hot prospects for contract cleaners.
Schools are still the No. 1 target market for growth opportunities. As educational facilities look to save money, outsourcing janitorial functions is an attractive possibility. However, continuing reluctance from school boards to trust outside vendors has resulted in only the slightest of market gain for contractors.
Despite a favorable predicted mergers and acquisitions market, BSCs don’t anticipate being very active. Less than 10 percent of contractors expect to acquire another company in 2018. This is a decrease from 2017 when 15 percent of respondents indicated they would grow through acquisitions (and later seemingly backed this up with numerous industry purchases reported last year).
There were nominal changes in purchasing habits compared to last year. BSCs still predominantly purchase products from a distributor and do so in person or by phone. About a quarter of BSCs still do not purchase any cleaning products online from their distributors. In addition, BSCs buy only 5 percent of their products from e-tailers like Amazon. Although online purchasing isn’t common yet, habits could change overnight as more Millennials and Gen Z enter the industry.
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