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ServiceChannel Data Shows Facility Management Spending is Growing Since the Pandemic
In the year since the mass COVID shutdowns of 2020, facilities spending across trades- notably on HVAC, janitorial, and plumbing- has rebounded to surpass the pre-pandemic rates of 2019 by 5 percent.
FREMONT, CA: New data released from ServiceChannel, the leading online platform for the procurement and delivery of distributed services, examines facility spend and service cost trends since 2018. More than 500 of the world's leading global brands rely on ServiceChannel to procure and manage services for their distributed facilities and assets across 75 countries worldwide.
The data is from the ServiceChannel Facilities Spend Index, a new economic indicator that tracks service costs and spending patterns across a range of markets and trades and is based on billions of dollars in services delivered across hundreds of thousands of locations on the ServiceChannel platform. Key findings of the ServiceChannel Facilities Spend Index include:
Facility Spend Is Growing After Recovery from Pandemic Lows
- Nationwide facilities spend across all trades climbed 33 percent in the year since the wide-scale shutdowns in the second half of 2020. Locations have spent 15 percent more in the first half of 2021 than in 2020.
- As essential businesses with open locations, the Grocery, Convenience, and Big Box Retail sectors maintained higher spend throughout the pandemic. Their budgets are now about 10 percent higher than 2019.
Service Costs have been Rising, with Recent Relief
- Overall service costs nationwide were 9 percent higher in Q2 2021 than a year earlier, driven by an 11 percent increase in material cost. Invoice costs peaked in Q4 2020 and have since fallen by 8 percent as labor time decreased.
- Since 2018, rising invoice costs were caused by increasing labor rates, up over 7 percent annually, along with growing material costs, up over 12 percent annually.
Cleaning Spend Remains Elevated but Is on the Decline
- Spending on the janitorial trade peaked up 24 percent YOY in Q4 2020 when locations had reopened, and cases were spiking, driven by a 29 percent increase in labor spend.
- Since then, nationwide spend has dropped 17 percent, but it remains 15 percent higher than in 2019.
Trade Spend Varies Greatly Across Metro Regions
- During pandemic shutdowns, New York City experienced the most significant drop in spending on all trades, cutting back 40 percent, while Atlanta saw the slightest change in overall spending, dropping just 13 percent.
- While costs nationwide are in line with the pre-pandemic trend, Dallas and Chicago have seen trade cost increases of more than 10 percent since 2019.
"If 2020 showed us anything, it's that businesses have to adapt quickly based on the latest data. Providing new tools like the Facilities Spend Index is one way we help our customers make informed, cost-effective decisions that directly impact their bottom line," said Tom Buiocchi, CEO of ServiceChannel. "To come back smarter from the pandemic, businesses need to be data-driven in how they manage their physical assets and forecast spend."