Rising pet ownership and a greater willingness to spend on pet health and wellness helped maintain growth during these years
Los Angeles, California (PRWEB) December 09, 2011
During the five years to 2016, IBISWorld, the nation’s largest publisher of industry research, forecasts that the Veterinary Services industry will benefit from increasing pet ownership, escalating demand for animal products and favorable legislation. These factors will contribute to revenue growing 3.8% per year on average to $35.4 billion, which includes growth of 2.9% in 2012. The growth in demand for veterinary services through 2016 will primarily be driven by demand for services for companion animals. While there will be moderate increases in the demand for veterinarians from public practice sources (veterinarians who work with the government to prevent animal-borne disease and injuries), these increases will be relatively small. The landscape will continue to change as consolidation picks up and female veterinarians increasingly enter the industry.
According to IBISWorld analyst, Sophia Snyder, the Veterinary industry in the United States is forecast to continue to expand over the five years to 2016, after remaining resilient over the five years to 2011. During the economic downturn, revenue growth slowed, mainly due to a drop in the number of client visits; however, “rising pet ownership and a greater willingness to spend on pet health and wellness helped maintain growth during these years,” says Snyder. In the five years to 2011, revenue increased at an average annual rate of 3.2% to $29.3 billion. Growth of 3.6% in 2011 is a marked improvement from 2009 and 2010, but lower than the gains of 2006 and 2007. This trend indicates the negative influence that falling per capita disposable income has had on operators, but it also demonstrates the industry's resilience.
Veterinary service operators have consolidated in an effort to maintain sales in the face of mounting competition from superstores and online retailers that sell pet products and medications. Major companies in the industry include VCA Antech Inc. who operates veterinary diagnostic laboratories and freestanding, full-service animal hospitals in the United States. VCA is based in Los Angeles and was founded in 1986 under the name Veterinary Centers of America. Consolidation has helped operators reduce costs to effectively compete with other providers. Wage costs have also decreased as a percentage of revenue, despite a veterinarian shortage in the United States. This factor is partly attributable to consolidation and a shift in some responsibilities from well-paid veterinarians to administrative staff.
Consolidation is projected to continue during the five years to 2016. During this period, the number of operators is expected to decline another 0.5% per year on average. The rise of larger practices will partly occur because of the mounting number of female veterinarians forecast to enter the work force. This trend will be fostered by continued growth in pet ownership, greater demand for animal products and favorable legislation that will encourage veterinarians to practice in underserved areas.
For more information, including latest trends, statistics, analysis and market share information, download the full report from IBISWorld on the Veterinary Services industry
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