Testing and Educational Support in the US Industry Market Research Report Now Available from IBISWorld

July 21, 2012

Despite the recession, the industry has managed to expand over the past five years, bolstered by federal legislation and the essential nature of many educational support services. Growth will remain strong in the next five years as greater high school graduation rates spur demand for college placement tests, boosting revenue. The rate of industry growth will also depend on government legislation and funding, as many operators wait to see what the next step will be after the reform of the controversial No Child Left Behind Act. Furthermore, increased use of online testing will aid profit margins by reducing wage costs. For these reasons, industry research firm IBISWorld has added a report on the Testing and Educational Support industry to its growing industry report collection.

Los Angeles, CA (PRWEB) July 21, 2012

In 2012, the Testing and Educational Support industry is expected to grow 2.2% to $16.0 billion. Over the past decade, the controversial No Child Left Behind (NCLB) Act of 2001 has been a primary driver of growth. The primary beneficiary has been the educational-testing segment; under the legislation, schools take assessments to ensure they meet the requirements to receive federal aid. “While reform is currently taking place, industry operators are still reaping the benefits of schools’ attempts to maintain standards,” says IBISWorld industry analyst Kevin Culbert. In the five years to 2012, IBISWorld estimates industry revenue has increased at an average of 4.1% annually.

Relatively strong growth has enticed new firms into the Testing and Educational Support industry. In the five years to 2012, the number of firms has increased 3.2% annually to 72,785. A large proportion of entrants are nonemployers, which represent some 90.0% of firms. “The rising number of operators has put downward pressure on industry profit,” adds Culbert. “However, declining profit margins have been mitigated by the increased use of online testing.” Online testing has caused wages to fall as a percentage of revenue, from 34.2% in 2008 to 33.7% in 2012.

Industry firms provide educational testing, educational consulting and student exchange programs. Testing service providers generate the lion’s share of revenue and help develop, distribute and score accountability and performance tests. They are also responsible for college entrance exams, such as the Scholastic Aptitude Test (SAT). With an increasing number of high school graduates, competition for college placement is high, helping boost revenue generated from standardized tests. The industry’s largest firms, including major players Pearson PLC and Educational Testing Service, operate in a number of locations, particularly those providing educational testing services to schools, universities and industry associations. However, many industry players are small, regional firms that often provide educational consulting services.

In the years to come, industry growth will depend on government legislation and funding, which leaves many operators waiting to see what the next step will be after NCLB. However, the increasing number of high school graduates is expected to contribute to continued growth. For more information, visit IBISWorld´s Testing and Educational Support in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry provide noninstructional support services for education industries. The major segments of this industry are educational testing services and educational consultants. This industry does not include computer software designers that develop education support software; those operations are included in the IT Consulting industry (IBISWorld industry report 54151).

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About IBISWorld Inc.

Recognized as the nation´s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/7/prweb9722055.htm

Source: prweb

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