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The Saudi Arabia facility management market size was USD 22.40 billion in 2020. The market is projected to grow from USD 22.87 billion in 2021 to USD 34.86 billion in 2028 at a CAGR of 6.2% in the 2021-2028 period. The impact of COVID-19 has been unprecedented and staggering, with facility management witnessing a positive demand shock across the country amid the pandemic. Based on our analysis, the market will exhibit a stellar growth of 0.6% in 2020. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Rising governmental push for industry localization has become an important effort to transform the economic situation of GCC countries, while reducing the region’s reliance on oil revenues. GCC region has been facing economic disruptions since late 1990’s with rapid depletion and technical obsolescence of hydrocarbon reserves, along with oil price fluctuations. Considering to which, the GCC countries have initiated several plans to spur the economies for developing private sectors that will generate job opportunities for the Saudi Arabia facility management labor force thus creating industry localization, and generating economic growth.
In the current market scenario, the Saudi 2030 Vision is playing the major role in surging the economic development in GCC region. This in return is expected to create ample of market opportunities for the building & construction, automotive, and heavy engineering sectors, henceforth projected to surge the demand for facility management services across these sectors while gaining advantages from the socio-economic factors in the coming years.
COVID-19 Encumbers Value & Supply Chain of FM Services
The COVID -19 outbreak had massive adverse impact on the value chain and supply chain operations in this industry. The disturbance in the value and supply chain with volatiles demand and supply of the facility services, along with strict government restrictions have curbed the logistics operations in the market.
As of November 2020, the number of COVID-19 active cases in GCC region reduced by 50%, with mortality rates falling below average rate. With the government’s focus over prioritizing health an economic need, fiscal and monetary policies were kept accommodative until the GCC region’s recovery is well established. Several manufacturers are currently working to install and initiate operations using robots to established a sustainable, cost effective and highly productive facility management department. These manufacturers are investing heavily in the development of robots and creation of collaborative robot infrastructure to automate these services and reduce the expenditure on the labor cost.
Currently, for the year 2020-2021 the Saudi Arabia facilities management market is estimated to exhibit stable growth rate, owed to the halted building and construction activities across the country, resulting in reduced demand of facility services from the end-user. The forecast years are expected to provide a steady recovery to the market owing to the reopening of the manufacturing facilities and government initiatives that are trying to reshape the economic downfall since the emergence of pandemic for better post COVID-19.
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Increasing Public-private-partnerships (PPP) and Energy Management to Boost Market Growth
Vision 2030 program will play a vital role in boosting the country’s economy and in building the non-oil economy. Under the program, the government of Saudi Arabia has announced to deploy the public-private-partnerships (PPP) to glorify its transportation, education and healthcare infrastructures and increasing energy management requirements. Furthermore, the government has planned to deploy PPP projects in the country to improve its services for beneficiaries by increasing accessibilities for the Saudi Arabia facility management industry.
Moreover, privatization will lead to huge investments that will ultimately strengthen the infrastructural growth of the country. Therefore, the facilities management market in the Kingdom will grow rapidly over the forecast period. Additionally, facilities management service providers are working continuously on adding energy management services in their portfolios. On the other hand, consumers are adopting such type of facility services, owing to rising energy costs and building’s energy consumptions.
Government Initiatives of Investing in Tourism and Construction Industry to Bolster Growth
Currently, the government of Saudi Arabia is continuously working on its economic diversifications by investing in its tourism industry. In the recent years, the government has invested heavily in diversifying its non-oil economy. Moreover, under the program named Vision 2030, the government has initiated to unlock its tourism sector by executing numerous substantial changes. In 2019, the government has started issuing tourist visas for the first time, which is the among the most significant changes recently. The government is promoting the relaxation of immigration rules and the development of tourism infrastructure. Also, over the next ten years, with the investment for tourism of more than USD 54 billion (SAR 200 billion), the Saudi Arabian government is promoting the private sector companies to invest in the kingdom.
Moreover, in April 2021 The Council of Economic and Development Affairs announced that the council is taking several recommendations on its 5th anniversary that are necessary to process the next phase of Saudi Vision 2030 to continue the development of construction and other new sectors. This process is expected to include development updates on Vision 2030 programs to ensure increase in the efficiency of spending, consistency with the targets, and response to the economic development.
Reduced Number of Trained Facility Service Providers to Hinder Market Growth
Reducing number of trained facility service for Saudi Arabia facility management providers, and professionals is limiting contracts and the operations while adversely affecting the training and development in the facility industry. The lower daily wages and inconsistent compensations discourage the development of skilled welders across Saudi Arabia, and other GCC economies. Also, with the sudden breakout of the pandemic in March 2020, the Kingdom of Saudi Arabia faced two major issues of COVID-19 pandemic, and historic drop in oil prices and revenue simultaneously in several decades. The sudden halt in several sectors led to slowed pace in the Vision 2030 programme with declining of the foreign direct investments.
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Soft Services Segment to Witness Highest Growth
By service type, the segment is divided into hard, soft and other facility services.
Amongst which the soft services segment is expected to grow significantly at the highest CAGR. This growth is attributed due to the increasing investments in waste management, energy management, waste water management and other green energy management sectors. The hard services segment holds the lion’s share in the market, including various types of services, such as cleaning, plumbing & drainage, and building fabric maintenance. Others services sub-segment is anticipated to depict stable growth that includes services, such as catering, environmental management, utility management, etc.
Healthcare Industry to Dominate Market in terms of Growth Rate
By industry vertical, the market segmentation is split into healthcare, government, education, military & defense, real estate, and others.
Healthcare industry is expected to grow significantly at highest CAGR during the forecast period, owing to the increase in the adoption of healthcare facilities management services as a precautionary measure in various countries. In the educational sector, services such as technical maintenance, space management, and integrated services management, need attention and are among the most important services the institution require.
The real estate segment is expected to dominate the market share for 2020 in the Saudi Arabia facilities management market in the coming years, owing to the government’s focus on investing in its infrastructural sector. Government sector is expected to witness stable market growth, owing to the government’s focus on investing in its infrastructural sector. The military & defense, and others segment are anticipated to grow steadily in the near future.
The Saudi Arabia facility management market growth is expected to rise significantly in the coming future, owing to the continuous in urbanization and industrialization. The governments are investing in the construction of railways, ports, airports and many other sectors. For this, the governments are contracting with multiple private contractors, including facility service providers, to keep the infrastructure clean and green. Wherein, the investment from the private sectors is expected to increase numerously in the coming future, which will drive the facilities management market across the regions.
However, the pandemic of novel coronavirus has restrained the growth the of the market in the country in 2020, owing to the immediate lockdown announced by the governments to stop the spread of the virus. Moreover, lesser impact of the pandemic has led to modest rise in renewal of the facility service contracts across this market. Moreover, the growth of the facilities management market is increasing gradually, owing to huge investments in the infrastructural sectors by public and private companies. Furthermore, Saudi Arabia contributes major advancements in facility industry as it is the fastest growing population country, which is continuously working on investing in healthcare and education sectors as well.
Sodexo, CBRE, Majid Al Futtaim – ENOVA and MEEM FM holds Considerable Market Share in Terms of Revenue
Major players are acquiring regional players and small & medium enterprises (SMEs) and are partnering with universities across the globe in order to create lucrative business opportunities in the unattainable markets. Major global and regional players emphasize on re-modelling their service activities by partnering with governmental bodies to create profitable, sustainable and manageable business structure for engineering and infrastructure sectors. These players emphasize on well-built culture of excellence in operations, internal control and business services to sustain in this market. Several players are re-modelling their key account approach (i.e. discontinuation of high-end non-key account customer contracts) to establish integrated facility services contracts for their legitimate customers.
An Infographic Representation of Saudi Arabia Facility Management Market
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The extensively researched report offers an elaborative analysis of numerous factors affecting the market. These include competitive landscape describing the opportunities, growth drivers, threats, key developments, and restraints. In addition to this, it further helps in analyzing, segmenting, and defining the market based on different segments such as equipment type, and applications. The report strategically analyses several strategies such as product innovations, mergers, alliances, joint ventures, and acquisitions adopted by players in the industry along with other market trends.
ATTRIBUTE | DETAILS |
Study Period | 2017 – 2028 |
Base Year | 2020 |
Estimated Year | 2021 |
Forecast Period | 2021 – 2028 |
Historical Period | 2017 – 2019 |
Unit | Value (USD billion) |
Segmentation | Service Type, and Industry Vertical |
By Service Type |
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By Industry Vertical |
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Fortune Business Insights says that the market was valued at USD 22.40 billion in 2020
By 2028, the market is expected to be worth USD 34.86 billion
Robust growth of 6.2% CAGR will be observed over the forecast period (2021-2028)
Within the service type criterion, the soft services sub-segment is expected to be the leading during the forecast period
Governments Initiation of investing in the tourism & construction industry for economic diversifications is expected to drive market growth
Sodexo, CBRE, Majid Al Futtaim – ENOVA and MEEM FM are the key market players
The real estate is expected to hold the highest share in the market
Reduced number of trained facility service providers to hinder the market growth
Increasing public-private-partnerships (PPP) and energy management is the latest market trend
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