Increasing university costs and the changing labor market will boost demand.
New York, NY (PRWEB) March 10, 2014
The Trade and Technical Schools industry has experienced fluctuations during the past five years, largely due to the recession and stagnant growth in federal funding. According to IBISWorld Industry Analyst Sarah Kahn, “The industry has been able to capitalize on the growing online education market, despite increased regulation.” During the economic crisis, the industry experienced high revenue growth, as individuals turned to trade and technical school in order to use their time wisely and sharpen their skills. Even with increasing demand for training in new technology, decreasing unemployment and low government funding are encouraging individuals to return to the job market. Industry revenue is expected to decrease 0.3% annually to $16.8 billion in the five years to 2014.
The industry benefited from a variety of factors during the recession. New technology has caused qualified tradespeople to enroll in continuing education courses to keep their skills up to date. Sustained unemployment has caused many job seekers to return to school to improve their chances of finding steady employment. Many schools have started offering a larger variety of classes and have expanded facilities to embrace the rising demand. As a result of this growth, the number of operators has increased at an annualized rate of 1.8% to 45,708 in the past five years. Overall revenue and online enrollment growth has caused profit margins to remain relatively strong, and an increase in online enrollment will likely drive profit growth further.
Changing labor market requirements along with the fresh memory of effects of unemployment are continuing to encourage job seekers to choose vocational courses over apprenticeships and on-the-job training, increasing revenue 0.5% in 2014 alone. “Furthermore, the increasing cost of four-year colleges has caused some people to seek alternative forms of education,” says Kahn. While technical and trade schools still face competition from the Junior Colleges industry (IBISWorld report 61121), future prospects are positive. Downstream demand is expected to remain strong for workers in most trades, and increasing requirements for employees to hold formal certification will aid industry growth. Demand for healthcare professions, spurred by an aging US population, will also increase demand for medical technicians and nurse's aides, bolstering the revenue of training schools. In the five years to 2019, revenue is expected to increase.
The Trade and Technical School industry is highly fragmented with a large number of small schools that generally specialize in a specific trade or small group of related trades. The low level of concentration is largely constrained by the nature of education services, where economies of scale are limited.
For more information, visit IBISWorld’s Trade and Technical School in the US industry report page.
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IBISWorld industry Report Key Topics
The Trade and Technical Schools industry includes schools that offer vocational and technical training in a variety of technical subjects and trades. Training often leads to job-specific certification. Instruction may be provided in diverse settings, such as the company's training facilities, the workplace, the home or through distance-learning methods. Major segments include cosmetology and barber schools, flight training, apprenticeship training and other technical training.
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