Growth

Childcare industry set to surge 34.2% over five years as Australia’s birth rate rises

Andrew Sadauskas /

Australia is set to experience a mini baby boom over the next five years, with industries such as childcare and health insurance set to surge as Australia’s birth rate rises by 6.4%, according to figures released by IBISWorld this week.

The report comes as the federal government allocated an additional $3.5 billion to reform Australia’s childcare system in this year’s budget, while announcing it will also cut paid parental leave for some parents.

According to the IBISWorld figures, Australia’s birth rate is set to increase by 6.4% over the five years to 2019-20 to reach 332,901 births annually, compared with 2.9% growth over the past five years.

The figures are good news for small businesses in the childcare services sector, which is set to see revenues grow by a massive 34.8%, from $9 billion per year in 2014-15 to $12 billion in 2019-20.

The figures include long day care, before and after-school care, and family day care, with children aged between three and four years comprising the largest demographic.

The health insurance industry is another winner, with its revenues set to grow from $21.1 billion per year to $28.759 billion over the same time frame, while fertility clinics are likely to see their revenues grow $575 million to $775 million.

Other industries set to grow include preschool education (up 22.3%), babysitting (up 21.7%), baby food (up 15.1%), toy retailing (up 8.1%), sanitary paper products (up 3.3%) and children’s clothing retailers (up 3%).

In a statement, Family Day Care Australia chief executive Carla Northam told SmartCompany there’s already been significant growth and demand from families for quality childcare and this growth is continuing across the board.

“We have also seen a change in Australia’s workforce,” Northam says.

“Gone are the days of the nine to five workday and there are an increasing number of parents employed outside of standard hours who are seeking flexible care options. Family day care is well placed to meet this demand with many educators providing care late at night, early in the morning, overnight and on weekends,” Northam says.

“Family day care is an important part of Australia’s childcare landscape providing 104,130 families with quality, flexible and affordable early childhood education and care.”

Northam cites flexibility, affordability and accessibility as key issues facing the government and the early childhood education and care sector.

“It’s important that key stakeholders in the early childhood education and care sector work together to ensure adequate funding is provided to meet the growing demand for quality, flexible and affordable childcare options,” Northam says.

In its statement, IBISWorld senior industry analyst Lauren Magner said demographic changes within Australia will fuel demand for a range of products and services, including childcare.

“An increase in the population that uses the industry’s services will lead to strong growth in demand for childcare,” Magner said.

“This will be aided by the continued rise in the female labour participation rate and ongoing government assistance through the Child Care Rebate and Child Care Benefit.”

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Andrew Sadauskas

Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.

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