Price Forecast: Facilities Management Services

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  • Tags : Facilities Management | Facilities Management Services | Price trend | Price forecast | Procurement research | Category market forecast

Recent Price Trend - Facilities Management Services

In the three years to 2017, the average price of facilities management services has been rising at an estimated annualized rate of 2.1%. Although the increasing price of services negatively affects buyers, the volatility of prices for facilities management services has been low, limiting the risk of sudden and extreme price fluctuations. As a result, buyers have been able to make more accurate budgets and cost estimations, strengthening buyer power.

Various market factors have been contributing to rising prices during the period. For one, input costs have been growing. Increasing demand for these services has been driving service providers to hire additional staff, pushing up average wages in this market. Additionally, suppliers have been experiencing rising operating costs stemming from increasing rent for office space. As costs have been rising, suppliers have been forced to raise service prices to protect their profit margins.

Shifts in demand have also supported price growth. Specifically, demand for facilities management services has been growing during the period in line with increases in the number of businesses nationwide. While the value of nonresidential construction has been falling and volatile during the period, an increase in the number of businesses has expanded the pool of potential buyers of these services. As downstream market grows, demand for these services strengthens. Higher demand for facilities management services reduces suppliers’ reliance on their individual buyers and has lowers competitive pressure, encouraging them to raise prices. However, corporate profit has been decreasing during the three years to 2017, suppressing demand and restricting price growth slightly.

Given the rising service prices during the three years to 2017, buyers should look to sign contracts soon to lock in lower rates and avoid steeper costs in the future. However, low price volatility allows buyers to carefully consider suppliers and select a service provider that best meets their requirements.


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