BCIS Quarterly Update: UK Maintenance, Cleaning and Energy Sector

Repair and maintenance output is expected to fall substantially during 2024 across the UK by 5.6 per cent compared with 2023, according to the latest quarterly forecast for the facilities management sector from the Building Cost Information Service (BCIS).

With output forecast to remain static in 2025, and then to slowly and gradually increase again, annual growth is expected be 1.4% in 2028.

BCIS chief data officer Karl Horton, explains: “While the economy was fragile and uncertain in 2023, repair and maintenance showed strong growth compared with new work, with output up 8.3% on the year.

“However, as private householder and the private commercial sector spending falls, and public sector budgets are constrained, we expect to see output fall in this sector too.

We expect that the activity on energy-efficiency retrofit, cladding remediation and RAAC issues – even if a sizable amount of this may be classified as new work for non-domestic buildings …

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“There are, however, encouraging indicators for the facilities management sector, including decreasing inflation and falling energy prices.

“We expect that the activity on energy-efficiency retrofit, cladding remediation and RAAC issues – even if a sizable amount of this may be classified as new work for non-domestic buildings – will push the repair and maintenance output to further growth, at least in the later stage of our forecast period.”

Maintenance costs, as measured by the BCIS All-in Maintenance Cost Indices, are set to rise by 19% in the same period to 4Q 2028.

Cleaning costs are forecast to increase by 32% by the end of 2028, with a 9.2% annual increase in 4Q 2024 due to factors including labour shortages and increases in the national living wage.

Energy costs are expected to fall by around 53% by 4Q 2028, though the sector is of course vulnerable to ongoing geopolitical movements and global conflict.

Horton adds: “While materials cost inflation has cooled considerably and there has been less pressure on availability, there are still concerns about developments in the Middle and Far East, which has the potential to put further pressure on supply and drive up prices.

“The slowing materials cost inflation, however, will be offset by higher inflation wage awards in the first two years of our forecast, with labour costs making up between two-thirds to three-quarters of maintenance costs.

“Although general inflation has decreased, wage awards continue to be influenced by inflation in previous periods and we forecast they will be above the current rate of inflation over the next two years.”

The quarterly BCIS maintenance, cleaning and energy briefing report presents the organisation’s perspective on activity across the private and public sectors based on a selection of economic indicators.

Visit www.bcis.co.uk.