SOURCE: Freedonia Group, Inc.

July 18, 2007 15:41 ET

U.S. Revenues for Building Maintenance Services to Reach $91.6 Billion in the Year 2011

CLEVELAND, OH--(Marketwire - July 18, 2007) - Revenues for building maintenance services (performed on a contract-basis only) are forecast to advance 5.6 percent per year to $91.6 billion in 2011. Growth will be aided by ongoing increases in both the number of households and the number of business establishments. Increasing availability and affordability of building maintenance services are anticipated to aid demand. However, competition will remain fierce in many service segments, including the large landscaping market, limiting firms' ability to raise prices. These and other trends are presented in "Building Maintenance Services," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The shift away from "do-it-yourself" to "do-it-for-me" building maintenance will persist, particularly in the residential market. Changes in demographics will support increasing building maintenance service revenues, as the number of dual-income households rises and the U.S. population ages. The growing number of baby boomers in the U.S. generally have the financial wherewithal to use professional services on a routine basis. Nevertheless, a cooldown in the new construction market from historical highs between 2001 to 2006 will limit residential gains.

The nonresidential market is expected to benefit from the ongoing trend toward outsourcing noncore functions to cut costs. While the office market has already seen much of this shift, others such as institutional, commercial and industrial will continue to see contract service growth. Strong new nonresidential construction activity will also expand the potential market for contract services.

Building maintenance services include landscaping, pest control, exterior building cleaning, swimming pool cleaning, snowplowing and others (e.g., HVAC and restroom deodorizing). Barriers to entry are low, with most segments being highly labor-intensive and requiring little fixed investment. For instance, a start-up landscaping company often needs little more than a truck and a lawnmower. New pest control and swimming pool firms face the most barriers, including insurance and licensing requirements.

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