Rising high school graduation rates will spur demand for placement tests, boosting industry revenue
Los Angeles, CA (PRWEB) September 07, 2013
In 2013, revenue for the Testing and Educational Support industry is expected to grow 5.7% to $15.5 billion. Over the past decade, the controversial No Child Left Behind (NCLB) Act of 2001 has been a primary driver of growth. The primary beneficiary has been the educational-testing segment; under the legislation, schools take assessments to ensure they meet the requirements to receive federal aid. According to IBISWorld Industry Analyst Sarah Kahn, “While reform is currently taking place, industry operators are still reaping the benefits of schools' attempts to maintain standards.” In the five years to 2013, IBISWorld estimates industry revenue will increase at an average of 4.6% annually.
Relatively strong industry growth has enticed new firms into the industry. A large proportion of entrants are non-employers. Online testing has caused wages to fall as a percentage of revenue, from 34.2% in 2008 to an estimated 28.0% in 2013.
Industry firms provide educational testing, educational consulting and student exchange programs. Testing service providers generate the lion's share of revenue and help develop, distribute and score accountability and performance tests. They are also responsible for college entrance exams, such as the Scholastic Aptitude Test (SAT). With an increasing number of high school graduates and international students, competition for college placement is high, helping boost revenue generated from standardized tests.
“In the years to come, industry growth will depend on government legislation and funding, which leaves many operators waiting to see what the next step will be after NCLB,” says Kahn. However, the increasing number of high school graduates will continue contributing to growth.
For more information, visit IBISWorld’s Testing and Educational Support in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Testing and Educational Support industry provide non-instructional support services for education industries. The major segments of this industry are educational testing services and educational consultants. This industry does not include computer software designers that develop education support software; those operations are included in the IT Consulting industry (IBISWorld industry report 54151).
Key External Drivers
Industry Life Cycle
Products and Markets
Products and Services
Globalization and Trade
Market Share Concentration
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Barriers to Entry
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