Projections based on data compiled and released in March by IHS Economics suggest that 2015 marks a positive year nationwide for franchising, with figures moving even beyond the prerecession year of 2007.
The Franchise Business Economic Outlook March 2015 reveals franchise business growth across the country and detailed growth stats for the year sector by sector. Increases across the board for franchising include GDP, output and employment, with both GDP and output showing year over year increases while growth in franchise employment and establishments are projected to stay the same as last year. All areas of analysis are projected to see higher figures than the last eight years, including the year right before the recession officially began.
Both decreases in oil prices and the rising value of the US dollar are having an impact according to the report. Additionally, the report also highlights concerns surrounding recent legislation that holds franchisors as “joint employers” as potential growth inhibitors.
Revisions to this year’s January version of the report reveal an increased outlook for employment and output concerning automotive industry businesses and business services businesses, respectively. Real estate sector businesses were revised downward due to reduced existing home sales and new housing units, though the sector still ranks third in overall output sales growth.
Quick service restaurants, as is usually the case, continue to lead in terms of job creation and this year the industry is expected to sit second in output growth, with lodging businesses ranked first. The retail products and services sector nonetheless is seeing a year over year increase in employment growth on par with quick service restaurants at 3.2%.
Personal services saw the highest year over year increase in establishments, which includes health care, education, recreation, entertainment, to name a few. Discretionary income is moving up for some consumers and as a result these kinds of businesses are expected to continue growing, with an increase in output sales by 5% in 2015.
To read the report in full and find out more about IHS Economics and annual projections for the franchise industry, please click here.