Cleanzine: your weekly cleaning and hygiene industry newsletter 18th April 2024 Issue no. 1110
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Germany is Europe's largest cleaning market - and here's why
With only a short time to go before CMS Berlin 2019 - Cleaning.Management.Services. opens its doors, the non-commercial sponsors of the international cleaning trade fair have emphasised the economic importance of the cleaning industry.
Figures published by the German Federal Guild Association of the Cleaning Trade (BIV), Bonn, the Cleaning Systems Trade Association in the German Mechanical Engineering Industry Association, Frankfurt/Main, and the Hygiene Industry Association (IHO), Frankfurt/Main, reveal that Germany remains Europe's strongest market for the cleaning industry.
For the manufacturers of cleaning machinery and equipment as well as cleaning, care and disinfectant products, the economic prospects are stable. However, global economic insecurity has begun to affect the market since the end of 2018. According to the 2019 Lünendonk report on 'Facility Service Providers in Germany' released this August, the biggest obstacle to their growth is severe personnel shortages, a situation which is unlikely to improve significantly in view of a possible economic downturn. The report also notes that digitalisation is currently not leading to a reduction in staff numbers.
The building cleaning trade is Germany's largest trade by far. In 2018, the workforce stood at 654,170, a high figure that was on a par with 2017 (662,115). In 2018, some 23,000 companies recorded a turnover of 17.9 billion euros, which marked a 5.9% increase over 2017 (16.9 billion euros). Germany's cleaning market is thus easily Europe's largest.
"We are tentatively optimistic about the industry's economic prospects," says Thomas Dietrich (pictured), national guild master of the building cleaning trade. "However, companies' forecasts are becoming more cautious. Ultimately, we can no longer deny the possibility of the German economy stagnating or going into recession. Domestic performance continues to drive growth.
At the same time we depend on a large number of customers in the industry as well as on export markets. Here especially, the trade conflict between the US and China and the situation surrounding Brexit are significantly impacting economic performance."
Ensuring that the German industry with the largest workforce employed sufficient personnel in the long term, is a matter of the highest priority, he adds:
"Despite the digital transformation this industry will remain a people business, requiring good manual skills for the foreseeable future. In our industry, the prospects for skilled workers in particular are very good. Agreed wages for trainees and employees are continuing to rise and in 2020 the rates for workers in East and West will converge. Next year, the industry's agreed minimum wage will rise to EUR 10.80, which is about 15% higher than the legal minimum wage.
"We hope that digitalisation will boost recruiting too. Not only are automation, sensor technology and robots making cleaning work easier, they are also making it more attractive for young people who are able to relate to new technology.
"Particularly in Berlin, a hub for startups and digitalisation, where some 40,000 building cleaning workers are already employed, we would like to see digitalisation and technology attracting more newcomers to the trade."
In Germany around 50 suppliers of commercial and industrial cleaning systems employ a workforce of approximately 5,400. Exports account for around 71% of German manufacturing. In 2018, German companies made up nearly 20% of the world market and around 50% of the European market.
Markus Asch, chairman of the Cleaning Systems Trade Association in the VDMA, says: "Since 2013 the number of orders received by the German cleaning machine industry has remained stable, despite growing insecurity in the market. That is remarkable, for with short processing times and stocks that last only a few weeks, the cleaning machine industry must respond quickly to any factors influencing the market.
"At 940 million euros, the German industry's turnover in 2018 was approximately 1% less than the previous year's figure.
"The uncertainty in the global economy began to affect the market at the end of 2018. Depending on the type of machinery, in the first half of 2019 and in particular the second quarter the industry suffered a marked decline. Overall, in the first half of 2019 turnover dropped nominally to around three per cent below last year's figures.
"We see this as heralding what could be a significant weakening of the economy. In this situation, with the industry's short throughput times and order backlogs of only a few weeks, an ability to react sensitively to market developments is required. A moderate decline of between three and four per cent is expected for 2019."
According to Markus, machinery manufacturers faced growing insecurity due to trade conflicts. Despite a law being passed to prevent a no-deal Brexit, this was a threat that represented another horror scenario, while a further delay to proceedings would do little to sort out the general situation.
There were also worries due to currency fluctuations affecting important sales markets, along with uncertainties emanating from Brussels. One example was the withdrawal at short notice by the EU Commission of the Ecodesign Directive for vacuum cleaners in response to an action brought before the European Court of Justice by a manufacturer. A new Directive would likely take years to develop. As a result, consumer trust was being squandered.
In addition to the economic situation, the manufacturers of cleaning machinery are also preoccupied with the topics of digitalisation and automation:
"In 2019 CMS will highlight innovations in the industry," promises Markus. "At the same time, new technological developments are a major attraction at this leading trade fair. The overall conditions in which CMS 2019 is taking place are encouraging, because of the many new items on display, and these are innovations we need. In the face of an increasingly harsh economic climate the aim is to become even more competitive and efficient."
Werner Schulze, chairman of the Building Cleaning Division of the IHO, believes that the focus is on developing innovative and above all high-performance products, which is what more and more customers are demanding.
"Sustainability plays an important part here," he acknowledges. "Our products help to maintain the value of buildings, and more and more public and private sector customers expect building cleaning companies to use sustainable products.
"At the same time, there is growing public interest in a sustainable economy and the issue of plastic waste. The companies of the IHO are addressing this challenge which affects society as a whole. Besides the complex issues surrounding sustainability, the topics of cleanliness and hygiene are also of great interest to society."
In general, the manufacturers of professional cleaning products are optimistic about the prospects for 2019/2020. Last year, turnover in Germany's professional cleaning and hygiene sector, whose workforce exceeded 7,000, was more than one billion euros. Building cleaning products accounted for around 25% of that figure.
At 4.5%, the industry's spending on research and development last year was significantly above the average for other branches of the chemical industry, underlining the sector's innovative drive. On the other hand, 2.7% was also spent on costs due to compliance with European laws (+0,2%) which continue to complicate the overall situation within the industry. According to Werner, the shortage of qualified personnel posed a problem.
CMS Berlin 2019 is organised by Messe Berlin GmbH. Most of the display area at CMS Berlin is occupied by manufacturers of cleaning machines and cleaning products. Members of the building cleaning trade are among the most important trade visitors being targeted at the fair. CMS Berlin 2019, will take place from 24th to 27th September at the Berlin Exhibition Grounds. Parallel with the cleaning trade fair, under the heading 'Inject Innovation', on 25th and 26th September, the CMS World Summit Berlin 2019 will gather the cleaning industry's decision-makers and creative thinkers in the German capital.
19th September 2019