Technical and Trade Schools

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 6,900 technical and trade schools in the US offer vocational and technical training for a variety of subjects and trades, such as cosmetology, aviation, or heavy equipment operation. Companies typically prepare students for a particular type of job and often provide job-specific certification. Companies generate the majority of revenue through tuition and fees. Non-profit organizations may receive funding from contributions, gifts, and grants.

Dependence On Employment Rates

Because workers often look to improve their skill set when unemployed, demand for technical and trade school education is dependent on overall employment rates for the US.

Industry size & Structure

The average technical and trade school operates out of a single location, employs 16-17 workers, and generates $2 million annually.

    • The technical and trade school industry consists of about 6,900 firms that employ 118,000 workers and generate $14 billion annually.
    • The industry includes technical and trade schools, cosmetology and barber schools, flight training schools, and apprentice training.
    • Cosmetology and barber schools account for 19% of firms and about 12% of industry revenue. Flight training schools account for 12% of firms and 25% of industry revenue. Apprenticeship training programs account about 16% of firms and 13% of revenue. A variety of trade and technical schools account for the remaining 53% of firms and 50% of revenue.
    • The overall industry is somewhat concentrated; the top 50 companies account for 38% of industry revenue. The flight training school sector is concentrated; the top 50 companies account for 83% of revenue.
    • Large companies include Lincoln Education Services, Fortis College, and Universal Technical Institute.
                                  Industry Forecast
                                  Technical and Trade Schools Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 9, 2024 - Moderate Revenue Growth Expected
                                  • Technical and trade school revenue is forecast to increase at a 5.17% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Institutions generate the majority of revenue by charging tuition and fees for technical and trade educational programs. Schools may also receive contributions, gifts, or grants from public or private sources. Industry employment has rebounded to pre-pandemic levels following a steep drop in 2020.
                                  • There will be about 14,800 openings for technical education teachers annually for the next decade, according to the US Bureau of Labor Statistics. The openings will primarily be to replace retiring teachers or those leaving the profession. The Bureau also projects a need for 28,000 diesel technicians and mechanics annually over the decade.
                                  • Technical and trade schools are likely to benefit from ongoing reshoring of manufacturing and other business activity. Construction spurred by reshoring is coming from a wide array of industries including life sciences, hospitals, and technology, according to construction firm Sterling Infrastructure's Chief Executive Officer Joe Cutillo. American firms’ mentions of nearshoring, reshoring and onshoring — synonyms for moving manufacturing back or closer to a company’s home country — increased an average of 216% year over year since the start of 2022, data compiled by Bloomberg showed. Many experts say that the coronavirus pandemic revealed the fragility of the globalized supply chain, spurring companies to accelerate their nearshoring plans in earnest. Backlogged ports and high-profile shipping blockages in the all-important Suez and Panama canals illustrated the risks of relying on cheap production in Latin America and Asia, while advances in automation and rising freight costs have made it more economically attractive to move production back to the US.
                                  • Enrollment at construction trade schools has increased nearly 20% while fewer students are going to traditional four-year colleges, according to The National Student Clearinghouse. Enrollment in construction trades increased 19% from 2021 through 2022. Four-year universities saw a nearly 4% drop in enrollment in the same time period. Community colleges have seen a 20% drop in student enrollment in the traditional age group (18-24) and a 16% drop in adult students since the beginning of the pandemic.
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