The following news release from IBISWorld was published on PRWeb.com:
The Libraries and Archives industry has suffered from declining government funding over the past five years. According to the Institute of Museum and Library Services, state and local governments account for more than 90.0% of public library revenue, and struggling state and local government budgets resulted in considerable cuts to public library funding. “Similarly, federal government grants to public libraries also contracted following the recession, due especially to growing concerns regarding the deficit,” according to IBISWorld Industry Analyst David Yang. Private libraries, which are funded through membership fees and endowment funds, also experienced tightening funding because falling disposable income made consumers less willing to purchase private library memberships. As a result, in the five years to 2014, IBISWorld expects industry revenue to fall at an average annual rate of 1.2% to $15.3 billion.
Declining government support over the past five years can be entirely attributed to the recession. Rising unemployment and falling disposable income resulted in declining tax revenue for state and local governments, which necessitated budget cuts. Since many public libraries serve as the only source of free computers and wireless internet in their community, according to the American Library Association, funding is anticipated to rise as the economy recovers and tax revenue increases. IBISWorld anticipates revenue to grow 1.2% in 2014.
“Although all public libraries and most private libraries operate on a nonprofit basis, cost control has been important over the past five years, especially as government funding decreased,” says Yang. Over the period, library privatization has grown. Local governments have been contracting out library operations to private for-profit companies, which can cut costs by centralizing operations and implementing flexible wages and benefits.
In the five years to 2019, IBISWorld forecasts that industry revenue will recover.
Government funding is anticipated to rise as economic growth picks up. Rising disposable income levels will also bolster consumer donations to libraries. Furthermore, according to the American Library Association, library visit frequency is correlated with education levels. As the number of students steadily increases over the next five years, demand for library services will grow.
For more information, visit IBISWorld’s Libraries and Archives in the US industry report page.
