London, United Kingdom (PRWEB) May 13, 2012
Pre-primary education centres have found themselves under increasing pressure over the past few years as demand for nursery places has slowed and government funding for under-fives education has stagnated. According to IBISWorld industry analyst Ee Jen Lee, “rising unemployment has eroded the ability of families to pay for pre-primary education and reduced the need to outsource care”. Parents who have lost their jobs or are working reduced hours now have more time to care for young children. Over the five years through 2012-13, industry revenue is expected to increase by an annualised 0.4%, to £4.34 billion. In 2012-13, the industry revenue growth is forecast to be relatively stronger at 2.9%.
The industry faces significant challenges over the next five years. Lee adds, “demographic trends over the medium term are unfavourable and nurseries are expected to experience increasing competition from child day-care centres, which are able to offer more flexible hours of operation to parents”. Weak public finances suggest that funding to the industry will be constrained over the next few years. The forecast for industry revenue is flat growth over the next five years.
The Pre-Primary Education industry has a low level of concentration with no single player accounting for more than 2.0% of revenue. Pre-primary education centres serve the needs of the local area, and it is very rare for any single establishment to enroll more than 200 children. This is due to the nature of education, and particularly early childhood education, which involves a high level of supervision and care. Consequently, there are limits to the benefits of economies of scale. Government statistics show that 36.4% of UK pre-primary education centres enroll 50 or fewer pupils. Another 45% take between 51 and 100 pupils, but just 200, or 0.1%, take between 200 and 300 children (the upper limit for all centres).
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IBISWorld industry Report Key Topics
Pre-primary education provision is offered to children aged three or four years in the year prior to commencing primary school at age five. Nursery education, as it is commonly known, is provided by each of the governments of the United Kingdom and systems vary between England, Scotland, Wales and Northern Ireland. The industry includes organised instruction delivered through nursery schools and nursery classes. Programmes offered by child day-care centres are excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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