MTW Research have issued a new research report which suggests that the contract cleaning market is set for £100 million growth in 2016, which is great news for the top 70 cleaning contractors that were analysed as part of the research. The report suggests that the growth will occur despite the introduction of the National Living Wage (NLW) and the impact this will have on market profitability in the short term.
The research involved analysis of companies with more than £3 billion of sales and found that just under 50% of contract cleaning companies experienced growth in the last 12 months. The report also highlights an underlying optimism in the contract cleaning market with 6% more contract cleaning companies forecast to enter the market by 2020.
MTW points to a core strength in the contract cleaning market, with more than 80% of contract cleaners having either a ‘good’ or ‘excellent’ credit rating in 2016, reflecting a generally strong trading environment despite ongoing challenges in some sectors of the market.
After a healthy 2015, the contract cleaning market is expected to experience solid growth with sales set for above inflation increases, especially in the care homes, healthcare, education & private commercial markets. The research anticipates more specialised cleaning services in particular leading the way in terms of value growth, which is great news for ConstructClean, our specialist cleaning service provider.
The research report also suggest that SMART cleaning and new technologies will continue to offer considerable growth opportunities for manufacturers and contract cleaning companies in 2016. Robotic technologies in the floor cleaning sector and the rise of IOT (Internet of Things) will stimulate growth for the large cleaning service providers and those companies seeking to increase the effectiveness of their cleaning services.
The report does sound a word of caution as it identifies a two-tier market with non-differentiated cleaning contractors experiencing pricing pressure and low client loyalty. At the lower value end of the market, acquisitions have increased with facilities management companies augmenting their economies of scale, a similar challenge to that faced by security companies in the manned guarding sector. Whilst some contractors are struggling to maintain margins and retain clients, the overall future for contract cleaning appears positive, buoyed by volume and value growth, which is great news for those companies in a position to take advantage.