Testing Laboratories

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 5,200 testing labs in the US perform physical, chemical and other analytical testing services to evaluate products, substances, or systems and provide certification for manufacturers and other industries. Labs may also provide independent data to support a product’s claims.

Dependence On Highly Skilled Workers

Testing labs require the skills of highly educated scientists, engineers, and technicians.

High Capital Requirements

The fixed costs associated with establishing a testing lab can be high.

Industry size & Structure

A typical testing lab operates out of a single location, employs 32-33 workers, and generates $4-5 million in annual revenue.

    • The testing lab industry consists of about 5,200 companies that employ 171,700 workers and generate $23 billion annually.
    • The testing lab industry is concentrated with the top 50 firms accounting for 46% of industry revenue.
    • Customer industries include defense, aerospace, telecommunications, automotive, consumer products, agricultural products, and industrial products.
    • Large domestic companies include KBR, TestAmerica Laboratories, and Pace Analytical Services. Some large international labs, such as Bureau Veritas, have US operations.
                                Industry Forecast
                                Testing Laboratories Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Nov 10, 2022 - Spectrometer-on-a-Chip Technology Could Have Widespread Applications
                                • According to a recent article in Science, researchers at Finland’s Aalto University have developed an extremely tiny spectrometer - a tool for measuring the properties of light - that fits on a microchip and is operated using artificial intelligence. The study suggested a proof-of-concept for the spectrometer-on-a-chip, which could have applications in numerous areas, including quality inspection platforms and biomedical analyzers. Current spectrometer equipment is bulky, but the spectrometer-on-a-chip greatly scales the size down, which significantly increases the number of potential applications.
                                • The global market for good manufacturing practices (GMP) testing services is expected to post strong growth amid continued demand for innovative new drugs and medical devices and rising government spending on healthcare. The worldwide market for GMP testing services had an estimated value of more than $1.8 billion in 2021 and is forecast to experience average annual growth of 6.7% through 2028, reaching a value of more than $2.8 billion, according to a recent report by The Insight Partners. The continuing trend of firms outsourcing GMP testing is another significant driver of industry growth.
                                • Several US and Canadian pension funds are reducing their investments in office buildings on the assumption that work-from-home will continue to reduce demand for office space, according to The Wall Street Journal. Partly as a hedge against inflation, pension funds are still betting on real estate, but they’re focusing investments in other areas, including lab space, warehouses, housing, and infrastructure projects. Today, private real estate funds have about 23% of their investments in office buildings compared to 34% three years ago, according to the National Council of Real Estate Investment Fiduciaries (NCREIF).
                                • Researchers at Germany’s Johannes Gutenberg University Mainz and the Helmholm Institute Mainz have discovered a way to reduce the size of nuclear magnetic resonance (NMR), which could lead to portable spectroscopy equipment and increase the scope of the technology’s use. NMR is an analytical tool with a broad range of uses, including resonance imaging used in medicine.
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