AVMA News (cont.) Economy’s impact
Because pet care spending is tied to consumers’ disposable income, economic fluctuations impact the veterinary industry accordingly.
Tis was true when, during and following the Great Recession from 2007-09, household budgets tightened. As a result, there was a perceived surplus of veterinarians and a soft labor market reflected by the decline of job offers for new veterinary graduates.
Ten came the COVID-19 pandemic in the early 2020s, when the government introduced $5 trillion of stimulus money into the economy and created significantly more disposable income. At the same time, people weren’t going out as much, spending money on things such as vacations and restaurants, but were at home with their pets. Veterinary visits spiked, creating a very tight veterinary labor market or “shortage,” according to the report.
It appears that the number of companion animal veterinarians likely will increase faster than the number of pets and pet- owning households in coming years, according to a recent analysis performed by Brakke Consulting Inc.
“All of that provided tremendous tailwinds to the profession… but now we’re just returning to the norm,” Volk said. “Te economy is still quite strong, and people are still spending, just not at the level before when they had so much money. We’re seeing that now as visits decline from a peak achieved in 2021 and 2022.”
Data from the Bureau of Labor Statistics’ (BLS) Consumer Price Index show prices for veterinary services have been increasing well into this year. Meanwhile, there’s been a slowdown in the volume of veterinary services, according to the Veterinary Industry Tracker
“To me, what that would signal is prices went up for a long time. Now visits are down 2%. Prices went up faster than they did for the overall economy, so now there is a slowdown in visits, which we would expect given higher prices,” said Matthew MacLachlan, an assistant professor of veterinary business and entrepreneurship at Cornell University and co-author of the report.
Current and future demand
According to AVMA surveys, the percentage of veterinarians in companion animal practice grew from 61% in 2001 to 73% in 2023. Te report’s authors expect that percentage to grow modestly between now and 2035.
At the same time, using data from MRI-Simmons and Packaged Facts, a syndicated study of U.S. consumers, the number of households owning dogs and cats grew from 38 million in 1998 to 66 million in 2023. While growth in recent years has been very low, the model the report authors used forecasts an approximately 2% annual growth rate in pet ownership through 2035.
Te report’s authors say this does not suggest that growth in the number of pet-owning households alone will spur dramatic growth in demand for veterinary services.
“Instead, if demand is to accelerate substantially, it would need to come from changes in consumer preferences, especially to increased frequency of visits to the veterinarian or an increased consumption of veterinary services during a visit,” according to the report.
Te report uses the BLS reports on spending on veterinary services, which comes from its Consumer Expenditures Survey, to forecast median household spending on veterinary services. Te results indicate “slow growth in the per-household spending on veterinary services around the median, indicating an expectation that the typical household who visits the veterinarian would only increase their spending a small amount over time.”
Current and future supply
Amid these fluctuations in the economy, a number of universities have announced their intentions to open new veterinary colleges.
38 KVMA News Continued on pg. 39
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