Baby love: Rising per capita disposable income and birth rates will drive industry growth

The Day Care industry provides day care to infants and children in addition to preschool services. Industry operators are mostly private and rely primarily on tuition paid by parents and funding from the government, which attempts to alleviate the cost on low-income households. Over the five years to 2018, industry revenue has grown as a result of sustained low unemployment, increased disposable income, an increase in the number of births and in federal spending on social services. Growth was only slightly tempered by a marginal decrease in the number of women participating in the workforce. Over the five years to 2023, revenue growth for the industry is expected to slow...purchase to read more.

Industry Statistics & Market Size
Revenue
$48bn
Annual Growth 13-18
1.3%
Forecast Growth 18-23
Profit
Employment
1.6m
Businesses
741,116
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The industry will continue to grow despite a projected decrease in federal funding for social services
  • An increase in the number of births and in federal funding for social services have bolstered demand
  • Private spending will remain the primary driver of demand for industry services
  • Industry Report - Industry Analysis Chapter

    The Day Care industry provides essential services to working families. It provides day care for infants and children, while also offering preschool instruction that prepares them for kindergarten. The industry can be broken into two primary categories: center-based day cares and home day cares. Center-based day cares are usually larger in size and in enrollment and, therefore, generate the largest portion of industry revenue. Home day care providers usually consist of a single primary caregiver, a nonemployer, and thus have a much smaller enrollment because they are limited by the staff-to-child ratio. Over the five years to 2018, industry revenue is estimated to grow an annualized 1.3% to $47.5 billion, with growth of 0.4% in 2018 alone. Ove...purchase to read more.

    Additional Insights for the Day Care Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Day Care Industry are

  • Ability to take advantage of government subsidies and other grants
  • Ability to vary services to suit different needs
  • Ability to alter mix of inputs in line with cost
  • IBISWorld analysts also discuss how external factors such as National unemployment rate and Number of births in the Day Care industry impact industry performance..

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    What's in this report

    What is the Day Care Industry?

    Industry operators provide day care services for children, primarily those under the age of five. Industry operators may also run preschool programs that prepare three- and four-year-old children for kindergarten. However, kindergarten education and in-home nanny services are excluded from industry services.

    Industry Products
  • In-home day care
  • Center-based day care
  • Pre-primary grade instructional programs
  • Other services and programs
  • Industry Activities
  • Providing child and infant day care
  • Providing preschool programs
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • National unemployment rate
  • Number of births
  • Per capita disposable income
  • Federal funding for social services
  • Labor force participation rate of women

  • Current Performance
  • Day care landscape
  • Prices and participation
  • Chart: Revenue Growth

  • Industry Outlook
  • Private spending
  • Public spending
  • Industry structure
  • Table: Day Care Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Day Care Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Professional, Scientific and Technical Services
  • Orphanages & Group Homes
  • Family Counseling & Crisis Intervention Services
  • Community Housing & Homeless Shelters
  • Consumers

  • Key Selling Industries
  • Book Publishing
  • Computer Stores
  • Food Service Contractors
  • Household Furniture Manufacturing
  • Janitorial Services
  • Toy, Doll & Game Manufacturing

  • Products & Services
  • Center-based day care
  • Pre-primary grade instructional programs
  • Other services and programs
  • In-home day care
  • Chart: Day Care Industry Products and Services Segmentation

  • Demand Determinants
  • Family trends
  • Government assistance

  • Major Markets
  • Private payers
  • Government funding
  • Chart: Major Market Segmentation for the Day Care Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages
  • Rent and utilities
  • Purchases
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Day Care

  • Basis of Competition
  • Price and quality
  • Location of service

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Day Care Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Day Care Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Day Care Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Per capita disposable income (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Child-To-Staff Ratio
  • Legal ratio mandated under state law for child care centers for the maximum number of children per staff member.
  • Employer-Sponsored
  • A day-care service that a company provides its workers through a contract with a local day-care center or facility.
  • Occupancy Rate
  • The rate of available spots at a day-care center that are filled. A rate of at least 70.0% is necessary for a center to be profitable.
  • What Our Customers Say

    Why buy this report?

    The Day Care industry market report contains strategic analysis of the key drivers influencing the industry. Save hours of time on research and prospecting using IBISWorld’s standardized, up-to-date reports on thousands of industries. Our industry research provides growth and profit forecasts for a five-year outlook period, presented in a clear and user-friendly format.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Day Care:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Day Care market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Day Care, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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