14 Apr 2017
Maintenance costs, as measured by the BCIS All-in Maintenance Cost Index, rose by 2.8% in the year to fourth quarter 2016.
The BCIS five-year forecast for the facilities management sector sees maintenance cost inflation rising to around 3% for the next two years and rising further to over 4% by 2021.
There are cost factors, particularly wages, that will be affected by the UK’s decision to leave the European Union. There is a great deal of uncertainty over the terms that will be agreed, however Prime Minister Theresa May's speech on 17 January and her letter to the EU triggering Article 50 makes it more likely that the UK will withdraw from the Single Market and the Customs Union.
BCIS has produced three scenario forecasts:
- An 'upside' scenario based on the assumption that we will remain in the European free trade area but with some restrictions on the movement of labour.
- A 'downside' scenario based on the assumption that we do not have favourable access to the European Union market and there are restrictions on the movement and availability of labour.
- A 'central' scenario based on some restrictions to trade and to the movement of labour.
Because of the effect on wages of a strong economy in the upside scenario and labour shortages in the downside scenario both result in costs rising faster than the central scenario.
The central scenario has been used as the published forecast for the maintenance cost indices.
The graph shows the three scenario forecasts.
Note: The terms 'central', 'upside' and 'downside' reflect the impact of the scenarios on overall construction demand.
The BCIS maintenance cost index and forecast together with indices and forecasts for cleaning and energy costs are included in the BCIS Building Running Costs Online Service.
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