Day Care in the US Industry Market Research Report from IBISWorld has Been Updated

The economic recovery will be a boon for this industry. As parents and guardians, particularly females, rejoin the workforce, demand for day care services will grow. Additionally, the expected increase in disposable incomes will allow families to spend more on child care, including high-value services like early education programs. One key area of growth for the industry is employer-sponsored child care services, which will become increasingly important as companies ramp up their efforts to attract and retain staff. For these reasons, industry research firm IBISWorld has updated a report on the Day Care industry in its growing industry report collection.

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IBISWorld Market Research

IBISWorld Market Research

As parents reenter the workforce, demand for child care services will rebound

Los Angeles, CA (PRWEB) October 29, 2012

In 2012, the Day Care industry is expected to generate $46.8 billion in revenue. According to IBISWorld analyst Caitlin Moldvay, “Day care services are often a necessary purchase for working families, a factor that mitigates revenue volatility for the industry.” Over the past five years, in spite of the economic recession, revenue growth has remained positive, supported by rising birthrates prior to the recession and the fact that child care represents a relatively nondiscretionary expense for households. From 2007 to 2012, industry revenue is expected to rise at an average annual rate of 2.3%. Nevertheless, revenue growth slowed as a result of rising unemployment during the recession because newly jobless parents were able to provide child care themselves. This factor was mitigated by an ongoing focus on child development, however, with a greater number parents investing in day care that includes high-value services, such as personalized education. During 2012, industry revenue is projected to rise 3.1% as parents begin to reenter the workforce and disposable income rises, which will result in greater usage of day care services.

The industry is largely composed of nonemploying industry operators; in fact, nonemployers make up over 90.0% of operators in the industry. “Over the past five years,” says Moldvay, “the number of companies offering day care has continued to grow, supported by continuing demand for child care services and low barriers to entry.” From 2007 to 2012, the number of enterprises is estimated to increase at an average annual rate of 2.1%, reaching 832,782 operators.

The Day Care industry has a low level of concentration; the four largest firms in the industry account for less than 5.0% of industry revenue in 2012. The industry is largely characterized by nonemployer firms, which make up an estimated 92.4% of operators according to the latest data from the US Census Bureau. Many people supplement their income by babysitting, or they partake in this activity when they are between jobs. However, new firms may arise out of long-standing relationships with many parents. Among the large firms, increasing consolidation by major players in the form of mergers and acquisitions has led to a gradual shift toward large establishments. Stark revenue growth before the recession prompted many players to acquire rivals in their attempts to grow quickly. This acquisition trend has temporarily slowed as a result of the slow economic recovery. However, companies such as Children's Learning Adventure are expected to expand their national presence quickly over the next five years. Over the next seven years, the company plans to open at least 200 more locations nationwide. Nevertheless, given the industry's low barriers to entry, the industry is likely to remain highly fragmented.

Beyond 2012, the industry will likely continue to prosper. Decreasing unemployment will lead to more parents re-entering the workforce and thus raise the demand child care. Additionally, large players will likely benefit from parents' increased focus on child development and education programs, a key growth area for the industry. Large players will therefore offer more personalized development services for children. Early education will be a strong marketing tool to attract new customers. IBISWorld forecasts that the industry will grow over the five years to 2017.

For more information, visit IBISWorld’s Day Care in the US industry report page.

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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 they are not in school, such as during the summer or after school hours. Establishments may also offer some educational programs.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & 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 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 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.


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