Growth Ahead for Contract Cleaning Services

Revenues for contract commercial and residential cleaning services in the U.S. are forecast to rise 4.5% annually to $66.8 billion by 2013, according to a new report from Freedonia Group.

The Cleveland-based industry research firm says gains will be driven by ongoing increases in both the number of households and the number of business establishments, coupled with growing availability and affordability of cleaning services.

The recession that began in late 2007 and persisted through 2008 had no discernable short-term effect on cleaning services revenues; in fact, many companies reduced operating expenses by outsourcing cleaning services as the economy worsened, Freedonia reported. Longer-term growth in cleaning services revenues, however, will require economic recovery to expand the potential pool of customers.

In its Commercial & Residential Cleaning Services study, Freedonia reports that nonresidential markets, which accounted for more than 75% of the total market in 2008, will get a boost from the trend to outsourcing cleaning functions to cut costs. And while some nonresidential markets have already seen much of this outsourcing take place, there remain opportunities for growth.

However, little to no growth is expected in nonresidential floor space, particularly in the office, commercial and industrial markets, which will moderate growth prospects.According to Freedonia, through 2013, growth in cleaning services revenues in nonresidential markets will range from 3.7% annually in the relatively mature office market to 4.7% per year in the institutional market. Interior building cleaning services are the largest contributor to cleaning services revenues, accounting for 74% of the total in 2008.

Growth in revenues will derive from expansions in the number of business establishments and the total inventory of the U.S. housing stock, both of which will create more potential customers for cleaning service providers. Also, specialized services such as special event clean-up and seasonal cleaning will continue to offer niche opportunities to cleaning companies, according to Freedonia.