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How is Business? Status Report 6 on For-Profit Child Care

by Roger Neugebauer
January/February 1990
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1989 was another eventful year in the for profit child care community. Expansion continued, although signs of a slowdown began to appear; new players emerged and a number of old players succumbed to mergers; the major chains concentrated on internal organizational matters; and employer child care developed as a growth niche.

Growth Continues, But For How Long?

In the 1980's the for profit sector of the child care industry grew at a rate of 10% to 12% per year. This rate of growth continued into 1989.

Industry watchers now maintain, with this decade of proprietary expansion coupled with the decline in support for non profit child care during the Reagan years, that for profit centers now comprise a majority of the nation's estimated 70,000 child care centers.

During 1989, however, harbingers of a potential slowdown emerged:

_ Inhibiting economic conditions. Richard Niglio, CEO of Children's Discovery Centers of America, cites a number of factors which present a "prescription for disturbed markets." These factors include the price sensitivity of the service, the shrinking labor supply, and threatened increases in licensing requirements.

Another economic factor slowing growth rates, according to Greg White, area vice president for Children's World Learning Centers, ...

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