Revenues for contract cleaning services are forecast to grow by 3.2 per cent annually to more than AUD $94.5 billion in 2019, spurred on by increased business formation, disposable personal income, and construction spending.
This prediction is outlined in a recent study by Freedonia that looks at three separate aspects of the US cleaning industry. First on the list is the non-residential market, which Freedonia states will continue to favour outsourced cleaning services over in-house cleaning staff.
‘Non-residential markets account for the vast majority of cleaning service revenues, making up almost 80 per cent of the total in 2014. In general, demand for cleaning services in the non-residential market is more inelastic than in the residential market because cleaning functions are often essential to presenting a safe and clean facility for customers and employees. However, in many cases these operations are outside the core capabilities of the business and so are contracted out. In addition, the 2010 Affordable Care Act’s insurance mandate has raised the cost of maintaining an in-house staff, prompting some companies to outsource services. Companies continue outsourcing cleaning activities rather than spend their resources hiring, training and maintaining an in-house cleaning staff. In addition, on-going expansion in both the amount of non-residential floor space and the number of businesses will spur demand for contract cleaning services.’
On the residential side of the market, Freedonia says ‘demand for contract cleaning services will accelerate through 2019 due to an increased number of households, an aging population and the growing number of dual-income households. Members of dual-income households often do not have the time or the inclination to perform cleaning tasks. Additionally, older citizens are sometimes less able to perform cleaning tasks than they once were, particularly as a growing share choose to stay in their homes and age in place. Accelerating growth in disposable personal income levels will also benefit residential cleaning services.’
Finally, the study notes that there are growth opportunities for companies who offer interior and exterior services. ‘Although larger contract cleaning companies are expanding their services into several markets and becoming a one-stop shop for all of a client’s cleaning needs, most businesses still specialise in a limited number of cleaning services. Interior cleaning services are the largest contributor to revenues, accounting for nearly three-quarters of the total in 2014. Growth in revenues will derive from expansions in both the number of business establishments and the number of dual-income households. Although maturing, outsourcing as a means of reducing operating costs will continue to support the utilisation of contract interior cleaning services in non-residential markets. Along with interior cleaning services, exterior cleaning and swimming pool cleaning services will also exhibit above average growth in 2019.’
One aspect of the cleaning industry that Freedonia predicts will slow down, however, is flooring and fabric cleaning. This is ‘due to a shift away from carpeting and a number of potential customers opting to clean these surfaces themselves.’