IBISWorld, recognised as the most trusted independent source of industry and market research in Australia, stated in their December 2013 industry report that the forecast for the commercial cleaning services industry will continue to be stable until 2019. Industry analyst Alen Allday believes that the continuous rise in demand for commercial cleaning services is due to the “high and dual-income households and the progressive ageing of the population.”
Demand for Cleaning Services
An increasing number of Australians, both in government and numerous businesses have taken to outsourcing cleaning services so that they can focus on more important tasks. In response to this growing demand, major cleaning companies began introducing additional cleaning services and organizations to strengthen the cleaning industry. They have also modified their services to satisfy the needs of their clients. Aside from that, a large number of homes for aged people also offer cleaning services for disabled people, increasing the number of industry players.
Added Service, More Jobs
Many customers have voiced out their preference for a service that can cater not only to cleaning but to also include services such as security, catering, and maintenance. In line with the increasing demand in the cleaning industry, the need for workers is also increasing. There are more openings for part-time and casual jobs in the cleaning industry which can subsequently alleviate the unemployment rate of the country. The lack of training, licensing, and regulating makes the entry to cleaning companies easy and simple. Since cleaning services in some businesses occur after office hours, however, part-time workers complain about the unsociable working hours and low pay. This resulted in higher turnover rates for the industry.
According to the report, the industry is also faced with a low level of market share concentration stemming from the numerous number of small scale businesses that dominate the industry. Although a number of key industry players are starting to position themselves as leaders, it would still take time for the commercial cleaning services industry to increase its market share concentration.
IBISWorld highlighted 3 key industry players in its recent report:
§ AMC Cleaning Group has the largest market share among the 3 industry players. With an estimated 11% market share, the company’s revenue in 2012 reached $41.7 million. Some reports indicate possible company expansion into New Zealand.
§ Jani-King’s 0.6% market share ranks second in the list. The US-based company has nearly 900 franchisees across Australia and New Zealand, with a 2013 revenue of $26.6 million.
§ Cleaning Wizard has an estimated market share of 0.4 %. Its clients are composed of residential and business owners. The company’s specialty is on floor cleaning services.
The Future of the Industry
IBISWorld reports that the industry, including industrial cleaning services, building interiors, residential, street and road, washroom and exterior building and window cleaning is projected to generate $4.3 billion this year. Only 7.1% of this could be accounted for profit. For the next five years, it is estimated that there will be steady growth for the industry, around 1.5% per year. Although the demand continues to rise, tighter competition and additional labor costs may hinder the profit growth of the industry. With this projection, the industry may reach $4.7 billion in revenue by 2018-2019, only 7.4% of the revenue could be accounted for the industry profit. This growth is attributed to stronger economic and non-residential construction growth.
§ Franchising: http://www.franchise.net.au/opportunities/the-cleaning-sector-industry-report-part-one
§ Report Linker: http://www.reportlinker.com/ci02462/Cleaning-Services.html
§ Spree Enterprise: http://www.spree.net.au/industry-news-commercial-cleaning-services-in-australia-industry-market-research-updated-by-ibisworld