U.S. Structural Pest Control Market Approaches $9.4 Billion

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The likelihood of a COVID-19 recession presents an unprecedented scenario for the professional pest control industry, Specialty Consultants says.

May 13, 2020

According to research released last month from Specialty Consultants, the professional pest control industry generated an estimated $9.359 billion in total service revenue in 2019, a 4.3 percent increase from the $8.971 billion measured in 2018. The report, “A Strategic Analysis of the U.S. Structural Pest Control Industry,” found the percentage increase this past year was more than twice the 2019 U.S. GDP increase of 2.1 percent. Recurring revenue accounted for 81.6 percent of the residential pest control service revenue. The study also found the U.S. structural pest control industry is comprised of more than 19,000 pest control firms.

Historically, the pest control industry has been somewhat resistant to the impact of economic recessions. During the Great Recession (2008-09), commercial service revenue declined by only 2.2 percent, largely due to pricing pressure from commercial clients. During the 2001-02 recession, total residential service revenue declined 5.4 percent from $2.78 billion to $2.63 billion. At the time this decline was offset by strong growth in the commercial and termite market segments.

The likelihood of a COVID-19 recession presents an unprecedented scenario for the professional pest control industry, Specialty Consultants says. “No one doubts that professional pest control is an ‘essential service’ and the National Pest Management Association has done a yeoman’s job of communicating with state and local governments of the need for professional pest control to protect public health,” the firm reported.

According to Specialty Consultants, the residential service sector may be spared somewhat as pest control operators shift to offering exterior services as they implement “social distancing” from homeowners. The termite segment is expected to decline by as much 10 percent as weakness in the real estate market negatively impacts both the pre- and post-construction segments. This past year more than 1.1 million post- construction termite treatments were completed. “We would expect that number to fall below a million in 2020,” said Rich Kalik, partner, Specialty Consultants.

“Our biggest concern is with the commercial market segment,” said Kalik. “Pest control operators are among the last to be paid for their ‘essential services’ to restaurants and other commercial businesses.” As of press time, many restaurants and retailers were reporting they would be unable to make monthly rent payments in April. As of mid-April, 42 states and about 95 percent of all Americans were under a directive to remain home. There are more than one million restaurants in the U.S. “Taken in total, restaurants alone represented more than 40 percent of all commercial accounts serviced this past year. That could mean the commercial market segment might decline by as much as $0.5 billion just from lost services to restaurants,” said Kalik. “At this time, we expect total 2020 industry revenue could decline nearly $1 billion which would take it below the total measured in 2017.”

The 2019 season market report is the 20th edition of “A Strategic Analysis of the U.S. Structural Pest Control Industry.” A total of 800 owners or managers of pest control companies were surveyed for this study. The syndicated market report is available for purchase only by subscription, sold in its entirety. Learn more at www.spcresearch.com.