By Nancy E. Hassel, American Pet Professionals
Every once in a while you see a subject line that stops you in your tracks. While we know the pet industry is recession proof and has been growing exponentially over the last decade, learning today that the U.S. Pet Industry generated $221.1 Billion dollars in direct, indirect and induced economic impact to the U.S. economy – should stop you in your tracks as well.
According to a new study conducted by George Mason University and released yesterday at the Pet Industry Leadership Conference held in Laguna Beach, California. Here is the information from the study:
In 2015, the U.S. Pet Industry generated $221.1 billion in total economic activity, which increased total value added by $102.3 billion (see table below). Including direct, indirect, and induced effects, the Pet Industry supported over 1.3 million U.S. jobs that paid more than $60 billion in salaries, wages, and benefits. The Pet Industry and its suppliers and linked service providers contributed almost $14 billion in federal government revenue in 2015 and an additional $8.9 billion to state and local jurisdictions.
Think about it, how many vendors or people do you hire just to run your business alone? How many employees do you employ? Small businesses to large corporate pet companies make an impact locally and nationally in the economy:
For example, manufacturers of dog and cat food purchase raw materials from farmers, packaging materials, transportation services, and a wide range of professional services. The suppliers of bags used for the food purchase paper, ink for labeling, and hire an accounting service to prepare tax filings. The accountant hires employees, rents office space, and hires a janitorial service to clean their offices.
The economic impact the pet industry makes in the U.S. alone is quite amazing to me. This study is something we haven’t seen before – we are used to learning about the annual expenditures pet parents make, which is of course very impressive, but seeing these numbers and how we are helping our economy is incredible.
“While annual spending for the pet industry is reported each year, this is the first time that anyone has looked at the widespread impact of the pet industry as a whole on the U.S. economy,” said Dr. Terry L. Clower, Professor of Public Policy at George Mason University’s Schar School of Policy and Government and Director of its Center on Regional Analysis, who headed the study. “Not only does the pet industry contribute more than $221 billion to the economy, but that also includes an impressive $23 billion in federal, state and local taxes.”
To determine the industry’s total economic impact, Clower and his team analyzed data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, the National Pet Owners Survey conducted biannually by American Pet Products Association (APPA), and other resources using the IMPLAN economic model. This analysis yielded estimates of direct, indirect, and induced economic impacts resulting from initial industry spending.
According to this report, this brings the annual consumer spending up to over $77 billion on by pet parents on their pets annually. Pet parents spend the most in the pet food and veterinary services areas of the industry, which we have known for a few years now. But other areas that were considered in the study included manufacturing of pet supplies and toys, pet pharmaceuticals, grooming, boarding and other services, wholesale and retail trade involving pet products, and the emerging pet health insurance industry.
Another area of the study that is very interesting, and some of know this already, is how much money owning a pet saves in healthcare costs.
The study is the second conducted by Dr. Clower and the Center for Regional Analysis showing benefits derived from the pet industry. In late 2015, Dr. Clower found that the pet industry saves $11.7 billion in healthcare costs as a result of pet ownership.
“The pet industry is one of the fastest growing industries in large part because Americans are becoming increasingly aware of how pets improve our lives; mentally, physically and emotionally,” added Doug Poindexter, PLC trustee. “We are committed to continuing efforts to promote and advance the responsible pet industry.”
So the next time you’re thinking of a new pet business idea, service to offer, person to hire and are unsure or scared to do it this should motivate you that you are in the right industry. Of course do your research and due diligence for sure, but also think about how your business alone could also be making a positive impact on our economy locally, nationally and globally for that matter.
To learn more about this study click here.