Melbourne, Australia (PRWEB) December 08, 2013
Demand for the Commercial Cleaning Services industry is strong and stable, driven by trends in non-dwelling construction activity and the outsourcing of cleaning services. Governments and businesses are outsourcing cleaning as they concentrate on their core activities and services and seek out cost efficiencies in operations. This trend is forecast to continue in the five years through 2018-19. IBISWorld industry analyst Alen Allday states “a rise in demand for residential cleaning services is resulting from high and dual-income households and the progressive ageing of the population.” Many in-home aged-care programs now offer cleaning services, particularly for disabled people.
Several major cleaning companies are offering additional services or forming strategic alliances with other business services operators. According to Allday, “clients are increasingly seeking to bundle cleaning, catering, security, maintenance and related services under a single, multi-service contract arrangement.” The industry's two largest players, ISS Facility Services and Spotless Group, have modified their strategies and operations to develop this trend. As a result, these companies have generally benefited from an expansion in revenue and profit. The franchised cleaning operators segment is rising steadily and providing increased competition to existing major players. As most cleaning activities need to occur after business hours, the industry has a significant component of casual and part-time employees. However, there is an associated high staff turnover rate due to the unsociable hours and low pay. The barriers to entry are minimal, with no regulation, licensing or training needed and minimal capital costs at the lower end. The low barriers to entry drive significant price-based competition in the industry. The industry is projected to generate revenue of $4.3 billion in 2013-14, up 2.3% for the year and with annualised growth of 2.8% over the past five years. This growth has been due to stronger economic and non-residential construction growth.
The Commercial Cleaning Services industry has a low level of market share concentration. This low concentration mainly stems from the large number of small business operators and the fragmented nature of the industry. However, major industry players, Spotless and ISS Facility Services, are building a dominant position through winning and retaining contracts, and acquisition strategies. Industry concentration for the larger operators is expected rise over the five years through 2018-19 due to mergers and acquisitions. However, the industry will largely remain highly fragmented with a significant small-business orientation. For more information, visit IBISWorld’s Commercial Cleaning Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry provide a wide range of commercial and domestic cleaning services. These services include the specialised commercial and industrial cleaning and the general cleaning of floors, windows and blinds within offices, factories, homes and other buildings. The industry’s services exclude carpet cleaning, shampooing services, steam cleaning and the sandblasting of building exteriors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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