FM Market Optimism Down And Economic Dangers Up, Latest IWFM Research Finds

London buildings under a blue sky The Institute of Workplace and Facilities Management’s (IWFM) latest research into the performance of the workplace and facilities management (FM) sector has revealed a dampened outlook for 2023. Higher costs, squeezed cash flows, and a stuttering economy are among the challenges causing the proportion of the sector expecting worse market conditions to double, compared to 2022 (31% in 2023, up from 15% in 2022).

Although many respondents (41%) believed the market will either improve or improve significantly in 2023, this is notably more pessimistic than the results of last year’s research, where most (59%) expected an improvement. The top three factors identified as having a negative impact on the sector were supply chain disruption (89%), increases in energy prices (86%), and the state of the UK economy, which rose 16 percentage points since 2022 (84% in 2023, up from 68% in 2022).

The findings come from the IWFM Market Outlook Survey, which the Institute issues every year to form a ‘state of the nation’ report for the FM sector. It puts the key questions direct to the professionals, providing IWFM members with vital insights into the sector’s performance over the past year, its expectations for the coming year, the biggest challenges it’s facing, and, new for 2023, IWFM thinking on how best to navigate them.

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There is also more positive news inside the report. Among the factors identified as having either a positive or significantly positive impact on the sector are changes in building safety legislation (58%), opportunities to support climate change measures (55%), and financial investment to mitigate climate change impacts (41%).

Sofie Hooper, Head of Policy and Research at IWFM, believes the future is bright for the sector, despite its challenges: “Evidently, challenges old and new weigh heavily on the minds of FMs, and it is little wonder under current conditions. Yet our research underlines real opportunities for the sector to grow and make a difference, such as building safety, technology, and sustainability. This year’s report also provides a range of useful ideas to support IWFM members in mitigating the worst impacts of the challenges. Plan effectively, embrace change intelligently, and the rewards will follow.”

In other findings, EDI (equity, diversity and inclusion) continues to grow in importance. Almost seven in ten respondents (69%) indicated they had seen an increased demand for EDI measures within their organisation, while just over half (51%) believe this is true for the market as a whole.