Pre-Primary Education in the UK Industry Market Research Report Now Updated by IBISWorld

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The Pre-Primary Education industry faces significant challenges over the next five years to 2018-19 as medium-term demographic trends are unfavourable, public finances remain weak and competition is increasing from child day-care centres that can offer parents more flexible hours. However, the perceived importance of an early education and government plans to relax regulations pertaining to the number of children an establishment can cater to, combined with unemployment slowly declining, is expected to see revenue return to modest growth.

IBISWorld industry market research
Operators are adapting to increased competition and low funding levels

The Pre-Primary Education industry includes a range of providers, such as local authority nursery schools and classes attached to primary schools, privately funded schools, community organisations and charities, and private for-profit businesses. Nurseries primarily cater to three- and four-year-olds, although operators are increasingly expanding their services to offer childcare for two-year-olds and even younger children. The necessity of nurseries and preschools for working parents generally prevents dramatic fluctuations in revenue. However, over the past five years, sustained recessionary conditions have had a significant impact on the industry. In the five years through 2013-14, industry revenue is estimated to decline at a compound annual rate of 0.5% to £3.3 billion.

According to IBISWorld industry analyst Temitope Onabanjo, “nurseries have found themselves under increasing pressure as demand for nursery places has slowed and government funding for educating under-fives has stagnated”. Rising unemployment has eroded families' ability to pay for pre-primary education. Parents who have lost their jobs or are working fewer hours now have more time to care for their young children. Profit margins are largely slim. A number of nurseries operate on a not-for profit basis. For-profit enterprises have struggled to maintain their margins in the face of declining demand. A number of reviews on the importance of early education are expected to boost demand for the industry and result in an increase of 1.1% during 2013-14.

The industry faces significant challenges over the next five years. Medium-term demographic trends are unfavourable and public finances remain weak. Nurseries are expected to experience increasing competition from child day-care centres, which can offer parents more flexible hours. Onabanjo adds, “the perceived importance of an early education and government plans to relax regulations pertaining to the number of children an establishment can cater to are projected to just about keep revenue afloat”. Furthermore, as unemployment slowly declines, an increase in the number of working parents should boost demand. Revenue is forecast to return to modest growth over the five years through 2018-19.

The Pre-Primary Education industry has a low level of market share concentration, as no single player accounts for more than 3.0% of industry revenue and the largest enterprises control just 4.1% of the market. Nurseries serve the needs of their local area, and it is very rare for any single establishment to take more than 200 children. This is due to the nature of education, and particularly early childhood education, which involves a high level of supervision and care. Consequently, there are limits to the benefits of economies of scale.

For more information on the Pre-Primary Education industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Pre-primary education is offered to children aged three or four in the year before they start primary school. Nursery education, as it is commonly known, is provided by each of the constituent governments of the United Kingdom and systems vary between England, Scotland, Wales and Northern Ireland. The industry includes organised instruction delivered through nursery schools and nursery classes. Programmes offered by child day-care centres are excluded.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit or call (020) 3008 6568.

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