US Spending on Professional Services to Increase 2.9% Annually in Nominal Terms to 2023

5/10/2019

Cleveland, OH, May 10, 2019 — US personal consumption expenditures (PCE) on professional services are forecast to grow 2.9% annually in nominal terms through 2023, according to Professional Services: United States, a report recently released by Freedonia Focus Reports. Advances in consumer incomes will allow providers to increase prices, boosting growth in nominal terms. The volume of services provided is expected to increase slightly over the forecast period due to population growth, driving gains in real terms. Constraints such as the intense competition in many of the segments – in addition to mature markets for many professional services – will limit further advances.

Spending on portfolio management and investment advice, the leading segment, is projected to see the fastest gains over the forecast period. Growth will be driven by increasing income levels, ongoing retirement of baby boomers, rising auto-enrollment of new hires into employer retirement plans, and the rollout of online financial technology platforms that permit a larger tranche of consumers to invest in the stock market. However, competition among portfolio management providers and continued movement away from commission-based to fee-based pricing models will constrain faster revenue growth.

These and other key insights are featured in Professional Services: United States. This report forecasts to 2023 PCE on professional services in nominal US dollars. Expenditures are segmented by service type in terms of:

  • portfolio management and investment advice
  • legal
  • banking
  • securities trading
  • tax preparation and accounting
  • other services such as employment placement, printing, and private parcel mail

To illustrate historical trends, total PCE, the various segments, and price indexes by segment are provided in annual series from 2008 to 2018.

The scope of this report encompasses fees and service charges paid by consumers for professional services. Also included are the fees paid by third parties on behalf of consumers (e.g., fees for retirement plans paid by employers). Spending on interest is excluded. Also excluded is the value of financial services furnished without payment (e.g., free checking accounts).

PCE data include spending by nonprofit institutions serving households (e.g., the value of education services provided by nonprofit colleges or medical care provided by nonprofit hospitals). Consequently, the spending by such parties on portfolio management fees, banking, legal, and other professional services is included.

More information about the report is available at:

https://www.freedoniafocusreports.com/Professional-Services-United-States-FF95063/?progid=91541