An increase in the number of household pets and the development of new laboratory tests have benefited the industry
Los Angeles, California (PRWEB) November 10, 2011
In the five years to 2016, revenue from the Veterinary Laboratories industry is forecast to increase at an average annualized rate of 3.8% to $5.5 billion, according to IBISWorld, the nation’s largest publisher of industry research. Through 2016, demand for services for companion animals will primarily drive the growth in demand for veterinary lab testing. As the US pet population expands, this factor will ultimately boost industry demand. IBISWorld estimates that pet ownership will increase at an average annualized rate of 3.6% in the five years to 2016.
According to IBISWorld analyst, Kevin Culbert, in the five years to 2011, the Veterinary Laboratories industry's revenue is expected to grow at an average annualized rate of 3.2% to $4.5 billion. “An increase in the number of household pets and the development of new laboratory tests have benefited the industry,” says Culbert. “Diagnostic tests are becoming a routine tool used by veterinarians to diagnose and monitor animal health conditions through urine, blood samples and other specimens.” Considerable advancements have been made in veterinary medicine that require the use of laboratory tests. Consequently, an increasing number of vets are outsourcing their laboratory testing needs.
Despite the recession, the Veterinary Laboratories industry has continued to grow throughout the past five years. Nevertheless, the decline in disposable income caused many consumers to opt out of high-cost tests. As a result, many firms increased their prices to offset a potential fall in profit. In 2011, IBISWorld estimates that industry profit margins will represent 15.0% of revenue. Profit margins have also increased as a result of some consolidation. In the five years to 2011, the number of industry firms has declined at an average annualized rate of 0.8% to 19,296. Large firms are purchasing existing labs and animal hospitals to expand their geographic reach and market share. The Veterinary Laboratories industry has a low level of market share concentration. The industry's top two players, IDEXX Laboratories and VCA Antech have both gained market share during the past five years. IDEXX Laboratories Inc. develops, manufactures and distributes products (including instruments and consumables) and provides services for the veterinary and food and water testing markets. VCA Antech is a leading provider of pet healthcare services. The company has a nationwide network of veterinary diagnostic laboratories and freestanding animal hospitals.
The elevated prices implemented during the recession are here to stay; they are expected to contribute to revenue growth of 3.6% in 2011. Over the next five years, the industry will continue to grow as pet owners increasingly prove they are willing to pay for pet healthcare, including diagnostic testing. This factor will boost demand for increasingly complex tests, many of which will be based off related tests in the human health field. The outsourced laboratory testing segment is expected to experience particularly strong growth, especially as the trend toward specialization in veterinary medicine continues. In the five years to 2016, IBISWorld estimates that industry revenue will increase at an average annualized rate of 3.8% to $5.5 billion.
For more information, download the full report from IBISWorld on the Veterinary Laboratories Industry
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