The US education industry comprises 77,000 institutions and schools with total revenue of about $67 billion. The sector includes pre-schools, elementary through high schools, colleges, universities, trade schools, training centers, technical, professional and vocational programs, after school programs, language and fine art schools.
Revenue growth for the Educational Services sector is forecast to decline in 2020; however, compared with other sectors, this sector’s decline is relatively subdued. Operators have transitioned quickly to distanced learning online due to the COVID-19 (coronavirus) pandemic, especially public and private school educators, including both K-12 and higher education institutions. However, a decline in consumer confidence will likely inhibit the ability of individuals to pay for private education.
TRENDS & CHALLENGES
Global demand for education services is growing as nations seek to educate their workforce and expand workers’ vocational and technological skills. A worldwide shortage of teachers, especially in developing nations, has had a significant impact on education services in many countries.
The Pandemic accelerated the convergence of digital media in the Education industry. Since many operators have to invest quickly in technology for distanced learning, the industry’s purchase costs are expected to increase, leading to unsteady profit.
Demand for other educational services, such as sports coaching, art schools, language instruction and tutoring and driving schools, is anticipated to decline at a faster rate than other services within the sector due to their discretionary nature.
Over the five years to 2026, the Education industry is expected to continue growing, aided by consistent increases in government funding, expected growth in per capita disposable income and more households income.
Additionally, expected growth in the Consumer Confidence Index, after a sharp dip in 2020 as a result of COVID-19, is anticipated to present opportunities for the sector as consumers spend on discretionary purchases, specifically on larger, costlier goods, such as postsecondary education. However, increased competition as a result of a shift toward online courses and programs is anticipated to constrain revenue growth.
key performance indicators
The information contained has been obtained from different sources deemed reliable, including DealStats, Deloitte, Dun & Bradstreet and Business Reference Guide. PBB does not make any representation or warranty as to the accuracy of the data.
- COST OF GOODS SOLD: 1%
- GROSS MARGIN: 99%
- net margin: 7%