As parents reenter the workforce, demand for child care services will rebound.
Los Angeles, CA (PRWEB) November 30, 2013
In 2013, the Day Care industry is expected to generate $46.6 billion in revenue. Day-care services are often a necessary expense for working families, a factor that mitigates revenue volatility for the industry. “Over the past five years, in spite of the economic recession, revenue has kept growing, supported by rising birthrates prior to the recession and the fact that child care represents a relatively nondiscretionary expense for households,” according to IBISWorld Industry Analyst Sally Lerman. From 2008 to 2013, industry revenue is expected to rise at an average annual rate of 1.4%. Nevertheless, revenue growth slowed because rising unemployment during the recession enabled newly jobless parents to provide child care themselves. This factor, however, was mitigated by an ongoing focus on child development, with a greater number of parents investing in day cares and preschools that include high-value services, such as personalized education. In 2013, industry revenue is projected to rise 1.6% as parents begin to reenter the workforce and disposable income rises, which will result in greater use of day-care services.
The industry largely comprises nonemploying operators; in fact, nonemployers make up over 90.0% of the companies in the industry. “Over the past five years, the number of companies offering day-care services has grown, supported by continuing demand for child-care services and low barriers to entry,” says Lerman. From 2008 to 2013, the number of enterprises is estimated to increase at an average annual rate of 2.7%, to 871,700 operators.
Beyond 2013, the industry will continue to prosper. Decreasing unemployment will lead to more parents reentering the workforce, raising demand for child-care services. Additionally, large players will likely benefit from parents' increased focus on child development and education programs, a key growth area for the industry. Large players will therefore offer more personalized development services for children. Early education will be a strong marketing tool to attract new customers.
For more information, visit IBISWorld’s Day Care in the US industry report page.
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IBISWorld industry Report Key Topics
The Day Care industry provides day-care services for infants and children. These establishments generally care for preschool children, but may care for older children when school is not in session, 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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