Government regulations mandating higher staff-to-child ratios and higher standards of staff qualifications are likely to increase wage costs for operators.
Melbourne, Australia (PRWEB) September 22, 2013
In 2011-12, over one million children between the ages of 0 and 12 attended Australian Government approved or state and territory government funded or provided childcare services. Similar numbers are expected to attend in 2013-14. According to IBISWorld industry analyst Arna Richardson, “Increasing government assistance for parents looking to put their children in day care has aided the Child Care Services industry in Australia”. This assistance has included various payments to help families afford childcare (principally the Child Care Rebate and Child Care Benefit) and encourage parents' return to the workforce. This assistance has helped drive industry growth over the five years through 2013-14, with revenue growing by an annualised 1.9%. In 2013-14, the industry is expected to generate revenue of $6.3 billion, up 3.8% from the previous year.
“Along with an increase in government support, a rise in the female labour participation rate over the past five years has reinforced demand for childcare,” says Richardson. Furthermore, relaxation of government regulation allowing childcare centres to register as kindergarten providers has bolstered the appeal of long day care centres, allowing them to compete directly with the Preschool Education industry. An associated industry development has been the move away from the provision of mere childcare services to more educational services in line with changing government policy. To this end, a number of childcare providers (both private and community-based) have changed the names of their facilities, re-labelling them as early learning centres. Prior to the collapse of former industry powerhouse ABC Learning, the industry was highly concentrated. Following the company’s collapse, the industry has returned a low level of market concentration, with Goodstart Early Learning Ltd the only major player.
Over the five years through 2018-19, continued government support and a mini baby boom will contribute to growth. However, this is conditional on shrinking margins for operators. Government regulations mandating higher staff-to-child ratios and higher standards of staff qualifications following the National Quality Standard are likely to increase wage costs for operators. This is a key factor leading to the dominance of non-profit operators, which looks to be the defining story of the Child Care Services industry in the long term.
For more information, visit IBISWorld’s Child Care Services in Australia industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry provide childcare. Childcare services are principally provided for children under 12 and include long day care centres, family day care, occasional care, outside school hours care and vacation care. Increasingly, childcare is being incorporated with education and vacation care, as parents work longer hours and rely more on care services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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