Pest Control Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 13,100 pest control services in the US exterminate and control the presence of unwanted creatures, such as insects, rodents, or other small animals. Companies may specialize in residential or non-residential services. Over 70% of industry revenue comes from residential services. Providers may also specialize in a particular industry, such as food manufacturing or health care.

Hazardous Substances

Pest control often involves the application of toxic chemicals that have the potential to harm humans, pets, plants, or the environment.

Government Regulation

Because pest control involves toxic substances, the EPA and state governments regulate various elements of operations, including licensing, record keeping, standards of application, training, and product registration.

Industry size & Structure

The average pest control services provider operates out of a single location, employs 10 workers, and generates $1.5 million annually.

    • The pest control services industry consists of about 13,100 companies that employ about 125,000 workers and generate about $20 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top four firms account for about 27% of industry sales. The majority of pest control service providers are small, independent companies or franchises.
    • Large companies include Rollins (Orkin) and Rentokil (Terminix).
                                  Industry Forecast
                                  Pest Control Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 12, 2024 - Office Vacancy Up in Q4
                                  • Nearly 20% of office space in major US cities was not leased as of Q4 2023, with the continuing popularity of remote work and a long-standing oversupply contributing to higher vacancy rates, according to Moody’s Analytics data in the Wall Street Journal. The 19.6% vacancy in the fourth quarter of 2023 was slightly higher than the 18.8% a year ago and is the highest vacancy rate since 1979. The top three US cities with the highest office vacancy rates in Q4 were all in Texas: Houston, Dallas, and Austin. Some industry analysts think the higher vacancy rate could linger due to the continuing popularity of working from home. Office occupancy levels are a demand indicator for pest control services companies, which count businesses and commercial property managers as customers.
                                  • Pest control companies will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                                  • Sales for the US pest control services industry are projected to rise at a nearly 6% CAGR from 2022 to 2027, reflecting a recovery in spending on consumer services, according to a recent Inforum forecast. This rate is faster than the projected growth of the overall economy. The forecast follows uneven sales growth during the pandemic in 2020 (3%), 2021 (13.1%), and 2022 (8.8%).
                                  • Inflation was the most important problem facing small business owners, according to 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell 0.1 points in November 2023 to 90.6, marking the 23rd consecutive month below the 49-year average of 98. Small business owners are still encountering historically high job opening levels, with a seasonally adjusted 54% of owners reporting hiring or trying to hire in November. According to NFIB Chief Economist Bill Dunkelberg, “Job openings on Main Street remain elevated as the economy saw a strong third quarter. However, even with the growing economy, small business owners have not seen a strong wave of workers to fill their open positions.” Over 60% of owners reported making capital outlays in the past six months, with 41% spending on new equipment, 23% acquiring vehicles, and 17% improving or expanding facilities.
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