Janitorial Services NAICS 561720

May 19, 2025 - Labor Costs Rise

• According to recent data from the Bureau of Labor Statistics (BLS), wage costs were on the rise for janitorial providers in March 2025 while employment was flat. Average wages at janitorial services increased 2.4% in March 2025 year over year, reaching $18.63 an hour for nonsupervisory employees. In the past decade, average wages in janitorial services increased 58.1%, higher than the 48.6% growth in overall private nonsupervisory employee wages. Employment by janitorial services grew 0.3% in March 2025 compared to a year ago. Janitorial businesses are monitoring pricing pressures resulting from an uncertain economic environment. Producer prices for janitorial services increased 6% in December 2024 compared to a year ago, per the BLS.
• According to a report in CleanLink, a significant upswing in demand for contract cleaning services by a range of business sectors is being driven by a greater emphasis on workplace cleanliness, hygiene, and the well-being of employees. Businesses are recognizing a boost in productivity levels connected to heightened cleanliness levels, in addition to fulfilling a fundamental operational necessity, per the report. Additional contract cleaning services being utilized include deep carpet cleaning to eliminate embedded contaminants, fogging for comprehensive disinfection, and targeted sanitation of high-touch areas. Companies are choosing contract cleaners for their flexibility to scale their services to meet the businesses’ needs and reduce the burden on internal administrative teams.

• The US janitorial services industry is projected to grow at a CAGR of 5.5% between 2025 and 2029, faster than the overall economy’s growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. Consumer sentiment is expected to improve in the forecast period, which bodes well for the management and administrative services sector, which includes janitorial services. Factors that may limit consumer spending are higher tariffs on consumer goods. Lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. The recent rise in remote work can impact needs related to working in corporate environments such as janitorial services. Remote work practices have faded to some extent since the pandemic, but remain more common than in earlier years. In the 12 months ending in December 2024, an average of 28% of workdays were spent at a remote location.
• Janitorial services providers may be affected by falling consumer confidence, an indicator of discretionary spending, in large part due to tariff uncertainty and an expectation of higher prices, according to two major indicators. The final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month, according to CFO Dive. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.” The Consumer Confidence Index declined by 7.9 points in April 2024, compared to the previous month. Consumer confidence levels have fallen for five consecutive months, reaching levels not seen since the beginning of the COVID pandemic, according to The Conference Board, which publishes the monthly index.