Industry Analysis
The Day Care industry is expected to grow to just over $56 billion over the next five years. Growth will be propelled by the increase in the number of children aged nine and younger and unemployment is projected to decline.
Increases in disposable income and corporate profit are also anticipated to expand access to services, thus contributing to revenue growth. Over the five year period, per capita disposable income is projected to increase at an annualized rate of 1.2% and is expected to contribute to industry revenue growth during the period by enabling families to cover the high cost of child care. Likewise, recovering low unemployment is expected to support strong demand for child care services, since parents who are employed will likely be unable to care for their children during the work day.
Employer-sponsored child care is expected to become more popular as employers increasingly recognize its benefits, such as an increased staff retention and productivity. Growth from the employer-sponsored segment is expected to occur most among large day care centers that offer cost-effective programs for employers in return for a long-term customer relationship. Day care companies are increasingly interested in long-term contracts that can guarantee revenue for a certain period. Such contracts can also boost profit since they smooth cost planning and outlay.