Analyzing the U.S. Child Care MarketPublished Date: 1/25/2021
The child day care industry provides day care to infants and children in addition to preschool and postschool services. Over the last five years (2012 – 2019), industry revenues has continued to grow due to low unemployment and increased income thus resulting in high demand for child care services. During this period, the demand for child care services continued to grow despite the high and increasing cost of child day care services. The industry is mainly made up of small and local service providers. Large corporate providers though few in number are looking at increasing their market share by acquiring small child care service providers.
The child care industry can be broken down into 3 categories –
- Early Education & Daycare
- Preschool & Postschool Care
- Others – in-home nanny service, small family owned facilities, early care, etc.
In 2020, the child day care services industry was severely impacted by the pandemic. With nearly 60% day care centers closing in March 2020 when the pandemic started. As a sector made up of smaller players, many could not compete, offering corporations opportunity to acquire smaller child care companies for increased market share. The sector saw a roadblock due to pandemic which resulted in unemployment rates spike and decline in enrollment rates. Also, another challenge for smaller child care facilities was to keep up with the state and federal education, health, and safety guidelines which results on higher operating costs.
Since, the closure in March 2020 due to pandemic, child care facilities have started operations and close to 75% facilities are operational today with the remaining also planning to open. The need to start the operations has resulted due to increasing demand from households in which both parents work full time. Now that work force is slowly getting back to work the need for day care facilities will increase. This industry has been one of the fastest growing in the U.S. and will continue to do so after the slowdown of 2020.
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