The U.S. self-storage industry will surpass the $30 billion mark for revenue in 2019, according to market research company IBISWorld.
In 2019, revenue for the industry will reach almost $31 billion, after edging close to $29.9 billion a year earlier, IBISWorld predicts. The 2019 figure would be 21 percent higher than the nearly $25.7 billion projected for this year. From 2014 to 2019, industry revenue is expected to grow at an annual rate of 3.8 percent.
According to a Self Storage Association estimate, the U.S. self-storage industry generated more than $24 billion in revenue in 2013. IBISWorld put the 2013 figure at almost $24.7 billion.
“The countercyclical nature of the self-storage industry helped it weather the recession better than most industries,” IBISWorld analyst Will McKitterick told The SpareFoot Storage Beat. “Now that the economic recovery is in full swing, revenue growth over the next five years is expected to be even more robust.”
McKitterick said expansion over the next five years in the self-storage industry will be bolstered by:
- Job growth.
- Rising household income.
- Increased consumer spending, with people needing more space to stash their purchases.
- Relocation for work, with people seeking temporary space to stash their stuff in conjunction with their moves.
McKitterick added that stepped-up use of storage by businesses also will contribute to industry expansion. In 2014, business customers will account for an estimated 19 percent of industry revenue, he said.
“Businesses, especially small online retailers, will use more self-storage and mini-warehouse facilities to store business equipment, displays and inventories,” McKitterick said. “Self-storage units are significantly less expensive than renting retail, office or warehouse space, and they do not require long-term leases.”
With increasing demand from residential and business customers, the self-storage industry faces a “bright” future, McKitterick said.
However, that brightness might dim a shade or two, according to McKitterick:
- With a rise in total rentable square footage, self-storage businesses likely will confront greater price competition and slightly lower profit margins.
- Development of new facilities, which was stifled by the economic downturn, is expected to ramp up as banks loosen the reins on lending.
- Merger-and-acquisition activity will accelerate as the industry matures.
Other IBISWorld projections for the U.S. self-storage sector:
- The number of storage facilities will climb to 53,383 in 2019, up 7 percent from an estimated 50,046 facilities in 2014. (The Self Storage Association pegged the number of facilities at 52,500 in 2013.)
- The number of employees in the sector will rise to 195,088 in 2019, up 19 percent from an estimated 166,907 in 2014. (In the fourth quarter of 2013, U.S. self storage facilities employed more than 172,000 people, according to the Self Storage Association.)
- Wages in the industry will jump to $4.3 billion in 2019, up 19 percent from an estimated $3.6 billion in 2014.