Demand for child care services will be strengthened by the decreasing level of unemployment
New York, NY (PRWEB) November 26, 2014
The Day Care industry provides centre-based care, home-based care and care from nannies or babysitters to children from infancy to 12 years of age. In the past five years, increasing per capita disposable income and a rising number of women in the workforce have helped drive industry growth as the country continues to recover from the economic downturn. According to IBISWorld Industry Analyst Sally Lerman, “The industry, however, faces significant pressures from the unemployment rate, which remains high, leaving a greater number of parents and family members able to stay home to care for children.” Revenue in the Day Care industry is expected to increase slowly in the five years to 2014. With economic conditions slowly improving, industry revenue is anticipated to rise only marginally in 2014.
“As the cost of child care has increased, the Government of Canada has implemented a subsidy to provide non-need based financial support to all families with young children,” says Lerman. At the same time, the number of children aged 19 and younger has risen, albeit slowly, as has the birth rate. Along with the industry's low barriers to entry, this has resulted in more affordable day care options for families and more parents placing their children in day care facilities. Therefore, the number of industry enterprises has increased slightly over the five years to 2014. As a result, profit margins are expected to rise slowly between 2009 and 2014.
The Day Care industry has a low level of concentration; the four largest companies in the industry account for a small share of industry revenue in 2014. Additionally, the industry has a large number of nonemployer operators. Many people supplement their income by babysitting or partaking in this activity when they are between jobs. However, new operations may arise out of long-standing relationships with many parents.
Increasing mergers and acquisitions among major players have led to a gradual shift toward large establishments. Stark revenue growth before the recession prompted many players to acquire rivals so as to grow quickly. This acquisition trend has temporarily slowed as a result of the slow economic recovery. However, companies like Kids & Company are expected to expand their national presence over the next five years. In 2015 alone, the company plans to open at least 15 more locations nationwide. Nevertheless, given the industry's low barriers to entry, the industry is likely to remain highly fragmented.
In the five years to 2019, the industry is forecast to continue on its upward trajectory. Demand for child care services will be strengthened by the decreasing level of unemployment requiring more working parents to make alternative arrangements for child care. Furthermore, in an effort to enhance the services day care centres provide and as parents focus on placing their children in a learning environment, many larger operators are expected to increase the developmental and educational programs offered in their facilities. Over the next five years, revenue is expected to increase slightly.
For more information, visit IBISWorld’s Day Care in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. 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 Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.