FM newsroom – LEO, FM benchmarking. The latest sentiment report from the Hungarian National Association of Facilities Management and Building Operators (LEO) forecasts a robust recovery in the third quarter of 2024.
Positive outlooks
It is the first survey in a long time in which operations managers are not dealing with the effects of back-to-back crises, but solving labour shortages has become a key factor as order backlogs increase, reports Realista.Ingatlan.com.
The decade-old Facility Management Sentiment Index (LVHI) is based on the views of market service providers’ managers. It is produced quarterly to provide a guide to market sentiment and future trends.
The index for the third quarter is 53.21 points, pointing to solid growth on the back of new project wins and a significant increase in optional orders. Although three more respondents highlighted the negative impact of the Ukrainian-Russian conflict, the pandemic and energy crisis now seem to have little impact on facilities management organisations.
The current barriers of growth
Conversely, the combined effects of labour shortages and high inflation put intense wage pressures on the facilities management (FM) industry. Nearly 60% of companies face labour shortages, which in many cases could hinder further growth.
Furthermore, 35% of responses identified inflation as a negative factor affecting profitability, indicating that the cost-increasing impact of inflation was only partially captured in the indexation negotiations earlier this year.
The impact of the crises on the FM market can also be traced in the FM Benchmarking book V published by LEO. Based on the written feedback from respondents, a few more elements are worth mentioning when looking at the processes affecting the sector. Thus, although the impact of the Russia-Ukraine conflict on energy has eased, there are still a number of active conflict zones around the world that could trigger another crisis.
Mandatory ESG and the construction sector
Of course, sustainability is also of increasing concern to operators, so making ESG rules and certification requirements mandatory could create a significant administrative burden. At the same time, it could help operators win additional orders by meeting environmental requirements.
With the decline in construction output, real estate development has stagnated, and the size of the operating market has also stopped growing. Although the development of the industry is accompanied by the construction of new factories, the handover of new production units and the acquisition of new operator tasks are only expected in the coming years.
