MENDHAM, N.J. – The structural pest control industry generated an estimated $6.628 billion in total service revenue in 2007, down 1.5 percent from the prior year. Strong revenue growth from commercial pest services could not offset sluggish residential service revenue and a particularly harsh termite market. The slumping real estate market, coupled with another weak termite swarm season across much of the country, resulted in a 9.2 percent decline in the number of post-construction termite treatments performed this past year. The pre-construction termite treatment market was especially hard hit by the 28.6 percent decline in single-family housing starts in 2007, compared with 2006.
Pest control operators reported an increased incidence of bed bugs in all regions of the country in 2007. In the Northeast region, more than five percent of their total general pest control service revenue was generated from servicing accounts for bed bugs. "Strikingly, the amount of service revenue generated from controlling bed bugs this past year surpassed the amount of revenue from controlling fire ants,” said Gary Curl, President.
Total manufacturer level revenue declined for the second year in a row. Weakness in the housing market, a slowing economy, and the expansion of generic product offerings, resulted in a disappointing year for most manufacturers and distributors. While beneficial to end-users, no single event put greater downward pressure on market value than the proliferation of post-patent products. While sales of generic pesticide products accounted for just 6.5 percent of the total manufacturer level sales this past year, the negative impact has been tremendous, as basic producers were forced to reduce prices and take other measures to hold marketshare.
In addition to providing a quantitative assessment of service revenue and pesticide product usage, the study measured key attributes of leading suppliers to the industry. The impact of the weak housing market, a slowing economy, new active ingredients, generic product sales, and the demand for ‘environmentally friendly’ or ‘green’ products are just a few of the competitive forces analyzed in this report. More than 800 owners or managers of pest control companies were personally interviewed for this study.
Founded in 2000, Specialty Products Consultants, LLC, headquartered in Mendham, N.J., is a market research company dedicated exclusively to the professional specialty pesticide industry.