Contract cleaning is a mature and highly fragmented market, and is one of the most competitive of all the contracted-out sectors. Despite the market being highly competitive and seeing increasing pressure on profit margins, market grew marginally between 2012 and 2014 and this growth accelerated between 2014 and 2016 as economic performance improved. A significant proportion of this growth was generated by the commercial sector as new office construction and refurbishment levels improved and take up and occupancy levels increased.
Within the market, profit margins are under pressure as contractors face rising labour costs and increasing raw material and equipment costs. In addition to this, there is increasing pressure on the cleaning industry to improve standards, particularly in the healthcare sector. To meet demands, there has been a concerted effort within the cleaning industry to improve standards and increase efficiency. The market has also suffered from public spending sector cuts which has significantly reduced budgets in the healthcare, education and central government sectors. Despite the challenges faced by contract cleaners, cleaning remains a necessity and the potential financial, quality and convenience benefits of the outsourcing of cleaning services continues to provide an attractive proposition, even during periods of economic uncertainty.
The market has also seen an underlying trend towards greater levels of outsourcing over the last decade which has driven demand for the contracting out of cleaning services. The use of new technology is driving advances in performance and efficiency, the first fully automated robotic floor cleaning machines have been launched in the UK. -The drive towards more sustainable cleaning practices has become an increasingly important issue. Clients are demanding more sustainable practices from contract cleaning companies to ensure that they waste less, reuse more and reduce pollution. Daytime cleaning is increasingly popular where a high standard of cleanliness is required in healthcare, offices, shops, leisure facilities and factories. Additionally, the demand for bundled service contracts will continue to be a strong driving force in the market as public and private sectors look to maximise value from contracts.
Overall, the prospects for the contract cleaning market are for moderate growth to 2021. The market will be impacted by economic uncertainty surrounding the Brexit negotiations and this will restrict growth in the short to medium term until the market recovers. This reduced growth level may limit the opportunities for new contracts and the expansion of existing contracts in the cleaning sector. Additionally, while the market will be negatively impacted by declines in several areas such as the retail and commercial sector. However, the market will be supported strong growth is transport sector as well as new technology driving advances.