Keeping the cogs turning

Despite the odds, the facilities management (FM) sector is bouncing back strongly from COVID-19, according to a survey by Gleeds. The pandemic had a considerable impact; with the implementation of lockdown restrictions leading to dwindling service requirements.

The easing of restrictions globally brought fresh concerns. Demand for materials and products had increased due to people filling their time at home with DIY. Production had lessened and shipping became slower and more expensive. As governments looked to stimulate social and economic recovery, there was a surge in activity from the construction, infrastructure and industry sectors.

Soaring commodities prices influenced the cost of materials. Russia’s devastating invasion of Ukraine is causing renewed energy cost escalation, leading to widespread price increases, particularly for energy-intensive materials such as steel. The conflict is also disrupting international trade routes. As a result, some suppliers have implemented purchasing limits and there are also renewed availability issues.

Of suppliers who responded to our survey, 67 percent said that materials/product price increases have impacted their organisation and 65 percent said there were issues with materials/product availability. Half of participants are seeing longer lead-in times and there are also issues reported with shipping/delivery and staff recruitment.

These percentages are higher amongst organisations operating in certain parts of the sector. For instance, 86 percent of those providing building fabric and roofing services report issues with materials/product price increases.

Increased energy costs are impacting the cost of living. In January, Consumer Price Inflation (CPI) reached the highest levels seen since March 1992. With the increased energy price cap introduction on 1 April, CPI is expected to reach higher levels and remain at these for a more extended period. The increase impacts wage expectations and many respondents noted issues filling roles.

Given all of these challenges, one would have forgiven the sector for being gloomy in its outlook. However, optimism shone through the responses. Recognising that although the pandemic was extremely tough for the industry, it helped to implement flexible working, new procedures and increased mental health awareness which will stand the sector in good stead going forwards. And although some purchase orders and work were slower to come through, expansion was being seen from new clients.

On average, respondents rated their confidence as 74 out of 100 for 2022. With 100 defined as feeling fully confident, there’s plenty of work and the respondent has no concerns. Generally, respondents felt that whilst they are being impacted by price escalation and availability issues, demand remains for FM services and recovery is expected to be swift.

Respondents urged clients to consider value rather than price alone to achieve the best outcomes. There is a danger that if price is the key consideration, delivery may be compromised, with costly rectification required afterwards. It could also discourage investment in continuing customer service excellence and delivery.

Our Gleeds FM team looks forward to supporting clients and collaborating with the supply chain to ensure the best outcomes as the sector comes back stronger from the challenges.