Commercial Cleaning Industry Recession Proof?

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Published: 06th August 2012
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A recent article in the San Francisco Chronicle sites some interesting findings from a new report that estimate the commercial and residential cleaning sectors’ combined market worth has hit $78 billion, suggesting the industry may be recession proof.

The Chronicle sites a study from Markedata Enterprises, Inc., a leading independent market research publisher of “off-the-shelf” studies about service industries that tracks value of the U.S. Commercial & Residential Cleaning Services Industry from 1987 through to 2016, including operating ratios, emerging trends, franchising, competitor profiles and more.

“This $78 billion business, which encompasses janitorial services, pest control, window cleaning, carpet/floor cleaning, parking lot maintenance, security, HVAC/facilities management, residential maid services, disaster restoration, and more, is very competitive, comprised of 820,157 mainly small operators, including 48,000 franchised outlets,” the article states.

Included in the report are commercial and residential cleaning companies ranging from small mom & pop operations to behemoths with annual revenues in the billions. Because of its relatively low start up costs and high demand, the report, according to the article, suggests that the industry may be relatively immune to economic downturns.

“Many feel that this business is recession-resistant,” the Chronicle states. “This is a low-tech business that’s easy to enter, and many do.”

The article does say that business slowed somewhat in 2009 as the housing bust and commercial real estate markets took a dive, but that in general, consumer demand for commercial and residential cleaning services has remained relatively solid.

One of the highpoints of the report covers the demand indicators for commercial cleaning services, suggesting that roughly 90 percent of contracted cleaning agreements cover the professional office space category. The commercial real estate market did have an impact on the industry as office vacancy rates fell.

Another interesting find in the commercial cleaning services report section is the indication of a growing demand by consumers (business owners) for so-called “green cleaning services.”

“Major industry issues include: a move to more certification and “green” cleaning, price compression, a shift to more science-based cleaning, longer sales cycles, high worker turnover, more day cleaning, the bundling of services by large accounts (total service concept), major geographic differences in the health of commercial and residential end users by city/region, and the growing importance of niche and specialty markets,” the report states.

Clearly businesses need commercial cleaning services and, even with a downturn in the office rental marketplace over the last five years, the industry seems rock steady. This is because of the inherent need: businesses that interface directly with clients must offer them a presentable workspace, regardless of their size or number of workers.

As the recession and real estate collapse were taking their toll on other service-oriented businesses, the commercial cleaning sector seems to have been moving along relatively unscathed, or at least avoiding serious industry retrenchment.

Although the report does not address this issue, another factor driving the life force of the commercial cleaning sector may be the rosining number of smaller start-up companies that began to dominate the employment landscape after the wave of corporate layoffs hit.

All told, the commercial cleaning services sector appears to be one of the few industries that can weather a recession well. Those businesses that remained intact during the height of the economic downturn and through to this day simply depended on maintaining the appearance of their office and workspaces as they rode out tight financial stretches.

No company wants to think of doing away with cleaning services and, based on the findings of this report, it seems cutting the janitor falls to the bottom of the list when it comes to corporate cuts in a downturn.

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