Market Trends of North America Hard Facility Management Industry
High HVAC Services Demand in the United States is Expected to Drive the Market
- The United States experiences a wide range of climate conditions, from extreme cold in northern regions to extreme hot in the southern states. This climatic diversity necessitates robust Heating, ventilation, and air conditioning (HVAC) systems to maintain comfortable indoor environments year-round. Consequently, hard facility management providers specializing in HVAC services are in constant demand to ensure that HVAC systems operate efficiently and reliably.
- According to the US Bureau of Labor Statistics, employment in heating, air conditioning, and refrigeration mechanics and installers was recorded at around 415,800 in 2022. It is anticipated that employment is forecasted to reach 438,800 by 2032. As the number of HVAC technicians increases, the expansion of the HVAC service industry will meet the rising demand. Facility management professionals, building owners, and businesses require skilled HVAC technicians to install, maintain, repair, and upgrade HVAC systems in their facilities.
- Increasing emphasis on energy efficiency and sustainability drives the need for HVAC system optimization. High-functioning maintenance (HFM) providers are essential in implementing energy-efficient technologies like smart thermostats, variable-speed motors, and advanced controls. This demand aligns with green building certifications and sustainability goals in both the public and private sectors.
- Also, rapid technological advancements in HVAC systems, including the integration of Internet of Things (IoT) sensors and smart controls, offer opportunities for innovation and optimization. HFM providers that adopt these technologies can offer clients enhanced system performance, predictive maintenance, and real-time monitoring, aligning with the demand for advanced solutions.
- Additionally, stringent environmental regulations and building codes necessitate compliance with HVAC-related standards. HFM providers must ensure that HVAC systems adhere to regulations, including energy efficiency mandates, refrigerant phase-outs, and emissions reductions. Failure to comply can result in penalties, emphasizing the need for expert HVAC management.
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Commercial End User is Expected to Hold Significant Market Share
- The United States is a developed economy with several manufacturing plants, commercial offices, and institutions, among others, which significantly contribute to the country's demand for hard facility management services. According to the American Institute of Architects, based on short-term projections, the US non-residential construction market is expected to grow by approximately 19.7% in 2023. In 2023, growth is expected to be the largest in industrial construction, with a year-on-year change close to 55%, and the lowest for religious buildings, which are expected to grow by roughly 5%. Such a huge rise in non-residential construction is expected to drive the demand for the studied market.
- Commercial end-user verticals encompass a wide range of verticals that require facility management services to maintain and operate their physical spaces efficiently. The commercial sector covers office buildings occupied by business services, such as corporate offices of manufacturers, IT and telecommunication, finance and insurance, property, and other service providers. These services often include the maintenance and management of mechanical, electrical, plumbing (MEP), HVAC systems, and various other aspects of facility upkeep.
- Commercial properties often feature complex mechanical, electrical, plumbing (MEP), and HVAC systems. These systems are vital for maintaining comfortable environments, ensuring safety, and supporting various business operations. Hard facility management services are needed to maintain and optimize these systems, preventing breakdowns and ensuring energy efficiency. Many businesses in the commercial sector rely on specialized equipment, such as manufacturing machinery, data center servers, and kitchen appliances (for restaurants). Regular maintenance and servicing of this equipment are crucial to prevent downtime, maintain productivity, and extend the equipment's lifespan.
- Moreover, according to the US Census Bureau, the value of commercial construction that has been put in place was recorded to reach USD 114.79 billion in 2022, a 21.47% rise in commercial construction value from the previous year, 2021, which recorded around USD 94.55 billion. The increase in commercial construction value indicates a dynamic commercial sector, which is a significant driver of demand for hard facility management services. As businesses invest in constructing and expanding commercial facilities, ongoing facility management, maintenance, and optimization services become increasingly important to ensure these properties operate efficiently, safely, and sustainably.
- The commercial entities cover office buildings constructed or occupied by business services, such as corporate offices of IT and communication, manufacturers, and other service providers, including corporate offices of finance and insurance companies. Due to the provision of necessary fitments, interiors, and commercial buildings, hard facility management services have gained significant importance, driving the country's commercial sector market. Further, the hard facility management market in the country is witnessing significant growth owing to the growing launches of new corporate offices from various sectors, more prominently IT and telecommunication offices.
- Further, the growing digitalization in the country's public sector coupled with the rising need to modernize public sector service delivery has attracted global IT companies to set up corporate offices in Canada, thus creating significant growth opportunities for hard facility management services. For instance, in July 2023, Infosys Public Services (IPS), a North America-based company of Infosys, announced the opening of its new subsidiary, Infosys Public Services Canada, Inc., headquartered in Ottawa, Ontario, with local offices in Mississauga, ON, Calgary AB, and Burnaby BC.
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