Facility Management Market, Global, 2024-2030

Technology, Sustainability, Workplace Optimization, and User Experience Drive Transformational Growth

The facility management (FM) sector is experiencing a major transformation due to external forces, changing customer demands, and internal constraints. Geopolitical instability, such as inflation, economic uncertainty, and global conflicts, have disrupted supply chains and raised the cost of operations. Although inflation has increased revenue, it has also compressed margins, and organizations are now concentrating on cost optimization and more outsourcing of FM. At the same time, radical changes in technology, labor market, and workplace demands are redefining service delivery.

The emergence of mobile, flexible workforces and the focus on sustainability and user experience require innovative, tech-enabled FM solutions. However, most companies have been slow to change, and they have been commoditized and their growth stagnated. FM providers need to go beyond the traditional models, be innovative and seek strategic partnerships or acquisitions to develop future-ready capabilities to stay competitive. The convergence of these forces is transforming the FM environment and necessitating a dynamic and responsive approach to address the changing needs of clients and the built environment at large.

Revenue Forecast

• The revenue estimate for the base year 2024 is $1.00 trillion with a CAGR of 5.2% for the study period 2024-2030.

Scope of Analysis

This study uses the following segmentation when analyzing the market by customer sector:

Public Sector:

• Healthcare, government, education, and other public sectors (e.g., military and defense, immigration, transport, prisons, emergency services, libraries, public buildings, and heritage and culture)

Private Sector:

• Professional services, financial services, industrial, and other private sectors (e.g., retail, hospitality, sport and leisure)

Definition of Regions

This study tracks the global market and focuses on 4 major regions:

• North America
• Europe
• Asia
• Rest of the World (RoW)
• The Impact of the Top 3 Strategic Imperatives on the Global Facility Management (FM) Industry

Why

• This study uses end-user contracts to calculate the facility management (FM) market’s revenue, including the outsourced FM market (excluding in-house FM services and small FM).
• The study will present in-house and small FM market opportunities to quantify the FM universe (total spending on all FM services and the addressable market).
• In-house FM covers the value of services the end user delivers using its internal staff, not an external service provider.
• Small FM relates to small, single-site contracts for small businesses that local service firms will cover.

Analyst Perspective

• The analysis categorizes sectors to provide clarity on market dynamics and growth drivers.
• Customer sectors include Public Sector (healthcare, government, education) and Private Sector (professional services, financial services).
• Regions analyzed include North America, Europe, Asia, and the Rest of the World (RoW).

Growth Environment

Competitive Environment

• 2024: Sodexo acquired Compass’s business in mainland China
• 2024: Bain Capital acquired Apleona from PAI Partners
• 2024: Compass acquired CH&CO (United Kingdom), 4Service (Norway), Dupont Restauration (France), and Hofmanns (Germany)
• 2024: Onet acquired ISS’s French business
• 2024: CBRE acquired J&J Worldwide Services
• 2023: GDI Integrated Facility Services acquired Atalian’s US FM business
• 2023: Emcor acquired ECM Holding Group Inc
• 2023: AEON Delight acquired Ask Maintenance Co (Japan)

Growth Drivers

• Ongoing government commitment to outsourcing in the public sector raises FM penetration and drives market revenues for outsourced FM services.
• Demand for cost savings and single-contact integrated solutions drives FM contract penetration and boosts revenues for integrated delivery models.
• The industrial and commercial sectors’ growing need for technical services boosts demand in the hard services segment.
• Economic uncertainty and low GDP growth could increase FM outsourcing rates as customers increase their focus on core process optimization, cost reduction, and improved productivity. High inflation will act as a tailwind for increasing prices and revenues.
• However, although this will drive revenue expansion, it will force up costs and pressure margins. Increased focus on energy management, environmental services, and sustainability drives revenue growth in the additional services segment.
• FM is converging with energy management, performance contracting, and sustainability management, driving the addressable market for FM service suppliers.
• Outsourcing traditionally in-house FM services in the industrial and manufacturing sectors will drive revenue growth across all service segments, especially hard and additional services.

Growth Restraints

• Budget constraints resulting from global economic uncertainty will increase price sensitivity, reduce opportunities for value-based upselling, and open the door to aggressive pricing strategies.
• The historical reliance on in-house FM service delivery and the lack of an outsourcing culture in several customer groups will slow the growth of outsourced FM penetration.
• Service commoditization, fierce price competition, and margin pressure (especially in the support/soft services market) will lead to severe price sensitivity among customers.
• The maturity of soft services outsourcing (especially in the private sector) will increase pressure on sales pipelines and severely limit opportunities.
• Skills shortages and difficulties in acquiring qualified staff negatively impacts the growth of hard FM and additional services.
• Underdeveloped and weak IFM offerings and few true IFM participants (other than some top suppliers) will limit IFM delivery models in the wider market, hindering customer awareness.
• Despite strong revenue growth in the public sector, complex tendering processes and the slow pace of awarding new contracts may be unattractive to many suppliers.