Issue link: http://psai.uberflip.com/i/783891
WEEK LY EDITION February 8, 2017 Portable Sanitation Business Forecast 2017 Part 1 of 2 One of the functions of a trade association is to review avail able data and try to give Members a sense of how the business environment will unfold. This week we take a look at some key indicators and use them to estimate what the portable sanitation industry can expect over the next few years. Our analysis is based on a review of data from Ibis World, Pro Data, and PSAI Members. Taken together, these data suggest that portable sanitation companies can generally expect the following trends to affect their businesses between 2017 and 2021. • Average annual growth in po rtable sanitation company revenue is projected to be approximately 2.4% to 2.8% per year during these years. o Continued growth in construction and the broader economic environment will primarily fuel the growth. o Temporary increases in demand will also be l ikely if natural disasters increase. o Demand due to concert and event promotion is expected to grow slightly over these years. o Demand from government spending, particularly in the areas of homeland security and infrastructure, is expected to increase as th e new US president's administration progresses. The overall effect cannot yet be estimated because the spending on security may be offset by contractions of spending in other areas. • The industry will continue to consolidate, though the rate will slow down . Whether the subsuming of medium - and larger - sized companies that are good candidates for consolidation are offset by new market entrants remains to be seen. Ibis World projects overall growth in business entities of 1% to 1.5%, but the PSAI believes this will be dependent upon the strength of the economy overall and the regulatory environment. • Industry regulation will play an important role in the industry's growth over the next five years. o If the current environmental regulatory scheme remains in place, the cost of compliance will tamp down profits and discourage market entrants. If the new presidential administration eases some regulations as it has promised to do, both profits and marke t entrants will likely go up. o There's concern that DOT regulations will require all industry drivers to possess commercial driver's licenses within the next several years. This has already occurred in California. Should this regulation be implemented more wid ely, labor costs will go up and… CONTINUED ON PAGE 2