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Business Services: Key Challenges and Opportunities

Posted by Sarah Schmidt

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Dec 29, 2015 8:30:00 AM

Business_Services.jpgCompanies in the business services sector provide a variety of B2B services such as security, landscaping, and waste management. In the U.S., there are 390,000 companies in the business services sector with annual sales of $815 billion. The 50 largest companies make up less than 25 percent of total revenue, according to First Research Inc.

The demand for business services tends to rise and fall with the overall economy, although some services, such as pest control, are more resistant to economic downturns. Europe and the U.S. are the primary markets; however, the business services sector is growing quickly in Colombia, Mexico, India, Indonesia, Kenya, and Poland, among other areas. In this blog post, we’ll explore different types of business services and examine potential challenges and opportunities within this sector.

Security Services

As the economy grows and new businesses set up shop, the market for security services will also expand. According to a 2015 report by the Freedonia Group, the demand for private security services in the U.S. will rise five percent per year through 2019 to approximately $68 billion. Nonresidential construction activity and perceived concerns about crime will help drive demand. Guarding services account for the largest share of revenue, although alarm monitoring is expected to gain market share in the future.

Landscaping

Over the past five years, the landscaping services industry has faced declining demand. A rebound may be in the cards, however. From 2015 to 2020, the construction sector is expected to experience a quick recovery, according to IBISWorld. A stronger economy will also help increase commercial growth, driving the demand for landscaping services on large corporate campuses.

Pest Control

In contrast, pest control services have experienced increasing revenues — even during difficult economic times. This market rose 6 percent each year over the past two decades, Catalina Research reports. However, the nonresidential market accounts for a smaller portion of total revenues. About 70 percent of revenues come from residential customers.

Janitorial Services

Unlike pest control, janitorial services were not immune to the effects of the recession. As real estate collapsed during the 2009 Great Recession, clients cut back on cleaning. Since 2011, the industry has rebounded, but it still faces a variety of challenges such as high worker turnover, consolidation, and regulation, according to a recent Marketdata study.

The market for U.S. commercial janitorial services is worth $52 billion and employs nearly 1 million workers. There are 765,000 companies, which include both small businesses and large corporations.

Waste Management

Companies in the waste management industry collect and dispose of garbage, run recycling operations, and decontaminate buildings. The amount of waste is driven by consumer spending and the health of the overall economy. In the U.S., the waste managment industry includes 24,000 establishments with a total annual revenue of $89 billion, according to First Research, Inc.

Find Out More

The business services sector also includes accounting, human resources, leasing, and consulting, among other areas. To learn more about these industries or to research other related topics, browse market studies on MarketResearch.com.

Browse Reports on Business Services & Administration

Sarah Schmidt
Marketing Writer/Editor
MarketResearch.com

Topics: Business Services & Administration, Industry Insights

    

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