- Tags : Facilities Management | Janitorial Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Janitorial Services
The average price of janitorial services has been increasing at an estimated annualized rate of 1.2% in the three years to 2017. Rising demand has been the primary contributor to recent price growth. Fortunately for buyers, stiff market competition has prevented janitorial service prices from rising more rapidly.
During the period, strengthening consumer spending has propelled growth in business activity. As consumers have begun to spend more, businesses across the economy have opened more establishments or have expanded their facilities, thereby spurring higher demand for janitorial services. Specifically, the number of US businesses has been rising in the past three years. In addition, office vacancy rates have trended downward, leading to more businesses seeking janitorial services for their occupied office spaces. Finally, although the value of private nonresidential construction has decreased marginally overall during the period, nonresidential construction activity has been highly volatile and rose 10.3% in 2014, which generated a period of high demand for new office spaces. These trends have led to rising demand for janitorial services, which has empowered suppliers with greater pricing leverage.
Changes in supplier material costs have also contributed to janitorial service price growth. Suppliers require various soap and cleaning agents to perform building cleaning. During the past three years, the price of soap and cleaning compounds has been rising. This trend has pushed up market suppliers’ operating costs, encouraging them to raise service prices to protect their profit margins.
Nevertheless, prices for janitorial services have displayed a low level of volatility, providing buyers with the ability to budget accurately for their janitorial expenses. Heavy price competition among suppliers contributes to low price volatility in that it forces suppliers to keep price growth in line with market trends or else risk losing business to competitors.
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