The cleaning industry is a broad collection of many different companies and specialties, from commercial janitorial services to housecleaning companies. In this presentation, we’ll take a look at some of the trends in the industry, and how they will affect the types of companies mentioned above in 2016.
According to a study by the investment bank Scott-Macon, the cleaning and janitorial industry is expected to grow faster between 2014 and 2020, at 4.3%, than it did in previous years (2.7% growth per year between 2010 and 2013). As a result, the market sector is expected to be worth nearly $60 billion in 2016, and to surpass that amount by 2017.
One of the reasons the cleaning services industry can undergo such growth is because of the low barrier of entry to start a successful cleaning company. In fact, the 4 largest companies in the industry account for less than 10% of the available market, with much of the rest taken up by smaller, often independent companies.
Why does the cleaning industry have such a low barrier for entry? There are several reasons, including: • A low level of market share concentration • Relatively low capital investment requirements • Few training requirements for employees
• High demand for cleaning services in the commercial sector and private homes
There are an estimated 829,522 cleaning and janitorial services companies currently operating in the US. Because of the broad spectrum of services this includes, many companies specialize in one particular element of professional janitorial and cleaning work.
The cleaning industry can be broken down into the following sectors: • Standard commercial cleaning – 77.6% • Residential cleaning – 7.0% • Damage restoration (water damage repair, mold removal, etc.) – 4.6% • Other – 10.5%
The majority of cleaning industry revenue is generated from the commercial and retail sectors (42.3% combined), with educational and healthcare facilities representing the fastest growing sectors (31.7% and 4.7%, respectively). Residences account for 7.0% of revenue for the industry.
All in all, the cleaning industry is expected to have a good year in 2016. Both commercial and residential business is expected to increase, thanks to the expected upswing in the economy and an increase in disposable household income. The number of cleaning companies is expected to grow 1.7% per year.
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All statistics and industry predictions used in this presentation are sourced from the Scott-Macon Janitorial Industry Review. The report in its entirety can be found here: http://www.scott-macon.com/announcements/scott-maconjanitorial-industry-review
Summary The cleaning and janitorial industry encompasses a wide variety of subsectors, serving both the commercial and residential markets. The industry is expected to grow for the next few years, both in revenue and the number of companies.