Key Drivers, Trends and Challenges to Facility Management Services Market
The facility management services market size in North America is forecast to increase by $114.36 billion from 2022 to 2027, at a compound annual growth rate (CAGR) of 7.69 percent, according to the recent market study by Technavio. The growth of the market will be driven by the growth in infrastructure development, the rising outsourcing activities in building management, and the growing need for safety and security.
The facility management services market in North America is highly fragmented. Small and medium-sized unorganized players with few clients and services dominated the market in the past. The growth in office space and the creation of more integrated facilities and campuses have created growth opportunities for more organized players.
The market share growth of the commercial buildings segment is significant for the market growth during the forecast period. This segment includes buildings like office, hospitality, retail, and healthcare buildings. Office buildings make up the majority of the commercial buildings segment among end-user sub-segments owing to the growing demand for a convenient, secure, and safe workplace. Facility management services have increased in North America because there are many office buildings in the region, especially in the US. Hence, it is anticipated that a number of corporate offices, business parks, and other office buildings will be constructed in the North American region, increasing the demand for effectively managed facilities during the forecast period.
A major driver fueling the growth of the market is the growing need for safety and security. As a result of the rise in security threats, businesses and other organizations in North America are putting a greater emphasis on safety and security measures and turning to facility management services to provide these services.
Hence, buildings, offices, and infrastructure are overseen and kept up with as a component of office to keep tenants and clients free from safety and security threats.
The growing demand for eco-friendly cleaning products is an emerging trend in the market that is expected to fuel the market growth. As consumers and businesses are becoming more aware of the negative effects of conventional cleaning products on the environment and public health, the demand for cleaning products made from natural, non-toxic, and biodegradable ingredients has increased. As a result, various facility management companies in North America are adapting to this trend by providing eco-friendly cleaning supplies and services. Moreover, they are putting into practice eco-friendly cleaning techniques that emphasize on minimizing the use of dangerous chemicals, saving energy, and reducing waste.
A major challenge impeding the market growth for facility management services in North America is the lack of skilled labor. Some of the components of facility management include maintenance and repair of building systems, cleaning and sanitation, security, and other related services. These jobs call for specialized training, expertise, and knowledge and since there aren't enough skilled workers in the facility management sector, this shortage is likely to persist in the future. The shortage of skilled labor includes an aging workforce, the low number of young people entering the sector, and competition for talent from other sectors. High labor cost to retain and recruit skilled labor, declining quality of services due to unskilled labor and lack of training are the reasons that hamper the market growth during the forecast period.
For additional facility management insight, the full report can be accessed here.