Issue link: http://psai.uberflip.com/i/783891
Portable Sanitation Business Forecast 2017 …continued Part 1 of 2 o … profit margins will be negatively affected over the short term. New market entrants will consider this requirement a barrier, but it is not one that will likely deter entrants once the initial implementation is past. • Competition has increased over the past several years due to price pressures from larger co mpanies with economies of scale, as well as from smaller companies entering the market with lean operations and a w illingness to underbid in order to gain contracts. Both of these things are likely to continue into the foreseeable future. • Market share concentration is expected to remain low. United Site Services is the largest portable sanitation company in the North American market with about 2.3% of the business. There are perhaps a dozen regional companie s that account for a combined 5 - 10% of the market, and the rest is dispersed among the remaining companies. • Substantial changes in the technology on which the industr y depends are not expected in the near future, although new toilet and waste disposal technologies may affect the nature of the industry over a five to ten year horizon. o The nearer term technology changes most likely to occur relate to software for routin g and recordkeeping and for driver risk management. There is also some indication that technology related to separation of fats, oils , and grease (FOG) from other waste could increase revenue in the sector. o Longer term we expect to see more affordable on site waste disposal/ processing technologies and new toilets that isolate the waste from the user experience. The economics of these developments are currently not favorable enough to affect the industry on a large scale. Over time we expect to see ROI improve and shifts to occur within the industry. • Labor costs as a share of revenue have been relatively steady over the past few years. Looking ahead, comparatively low wages in the industry may result in difficulty finding and retaining staff in an increasingly competitive labor market. Hiring and retaining properly credentialed truck drivers is expected to become increasingly difficult. Total industry employment will likely grow about 2% to 2.5% annually over the next few years. Next week we will look more dee ply at the outlook for construction in 2017 through the post - election lens. Stay tuned! W EEKLY EDITION FEB 8, 2017 P AGE 2