As parents reenter the workforce, demand for child care services will rebound
Los Angeles, CA (PRWEB) March 05, 2012
In 2012, the Day Care industry is expected to generate $46.8 billion in revenue. Day care services are often a necessary purchase for working families, a factor that mitigates revenue volatility for the industry. According to IBISWorld industry analyst Caitlin Moldvay, in spite of the economic recession, revenue growth has remained positive over the past five years, supported by rising birthrates prior to the recession and the fact that child care represents a relatively nondiscretionary expense for households. From 2007 to 2012, industry revenue is expected to rise at an average annual rate of 2.3%. In spite of this, revenue growth slowed during the recession because rising unemployment meant that a greater number of parents were able to provide child care themselves. However, this factor was mitigated by an ongoing focus on child development, which has resulted in a greater number parents investing in day care that included high-value services, such as personalized education, says Moldvay. During 2012, industry revenue is projected to rise as parents begin to reenter the workforce and disposable income rises, which will result in greater usage of day care services.
The Day Care industry has a low level of concentration and is largely composed of nonemploying industry operators. As a result, there are no major players in this industry. Over the past five years, the number of companies offering day care has continued to grow, supported by continuing demand for child care services and low barriers to entry. From 2007 to 2012, the number of enterprises increased at an average annual rate of 2.1%, reaching 832,782 operators.
Beyond 2012, the industry will likely continue to prosper. As the employment picture brightens toward the end of the five-year period, more parents will demand child care. Demand growth for the industry will be particularly evident among women who return to the workforce. Additionally, large players will likely benefit from parents' increased focus on child development and education. With more money in their pockets, parents will increasingly invest in their children. In turn, large players will offer personalized development services for children. Early education will be a strong marketing tool to attract new customers. IBISWorld forecasts that the industry will grow over the five years to 2017. For more information, visit IBISWorld’s Day Care in the US industry page.
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IBISWorld industry Report Key Topics
This industry provides day care services for infants and children. These establishments generally care for preschool children, but may care for older children when they are not in school, such as during the summer or after school hours. Establishments may also offer some educational programs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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