A snapshot of the Australian Termite Market in 2020 – topline review of pre-construction and post-construction markets, termite services prices, expectations for the future and more.
The termite segment is a significant proportion of the pest control market, with termite treatments being high value sales, often with good pro t margins. Using survey feedback from pest managers, the Termite Market Snapshot 2020 aims to provide the industry with a summary of the state of the market.
Around 95% of respondents said they carried out termite inspections and termite treatments. This is perhaps not surprising as it is a survey of the termite market and it is likely that most of the ‘general pest only’ companies would not have responded. However, only 60% of respondents said they carried out pre-construction work, with 75% providing pre-purchase pest inspection services.
It was encouraging to see that over 77% of pest managers offer their customers both liquid soil treatments and baiting systems, with 14% offering only liquid soil treatments and 9% only offering baiting systems. It is important to remember that no single system is capable of providing protection under all circumstances for all construction types.
Two thirds of pest managers state Coptotermes species as the main pest termite in their area, with 20% of pest managers mentioning Schedorhinotermes as the most dominant. However, this varies by state with nearly 50% of pest managers in Queensland stating that Schedorhinotermes species are the most dominant, with pest managers in other states indicating that Coptotermes species dominate.
Termite swarms generally occur from September through to April (Figure 1), with little variation between states. Interestingly, 39% of pest managers thought there had been fewer swarms this year compared to the previous season, with only 18% thinking the number had increased. Although there is always excitement when the first swarms of the season appear and undoubtably the appearance of alates triggers some calls from concerned homeowners, 50% of pest managers think that swarms are not necessarily a good predictor of the size of the termite season (23% think they are).
Although there was a lot of variation in the percentage of revenue pest managers gained from termite control work (inspections plus treatment), the average was just short of 50%, and it would appear that overall the amount of termite work was about the same this year as last year.
Despite the uncertainty with the current COVID-19 situation, pest managers appear quite positive about the termite market, with 37% thinking that the size of the market will increase in the coming season and 23% believing a decrease is more likely (Figure 2). Furthermore, 47% of respondents believe that termite treatment prices will increase in the future with only 7% thinking they will decrease.
However, with the slump in the housing market, the outlook of pest managers on the pre-construction termite market is a bit more gloomy, with 35% expecting a decrease and 20% expecting an increase in the coming year. Hopefully, with the pest managers involved in pre-construction indicating that pre-construction work only accounted for around 14% of their total revenue, most of these business should be able to absorb a drop in pre-construction work.
Pricing is always a topic of interest. The pricing of a termite inspection for the average four-bedroom home on a concrete slab varied from $120 to $420, with the average being $253. The pricing of liquid soil treatments on the same size home varied from $700 to $4000, with the average being $2793. (It may be a bit higher than this, as the upper limit in the survey was set at $4000.)
However, it is interesting to note the wide variations between states, with the cost of inspections and treatments signi cantly lower in Western Australia compared to the rest of the country (Figure 3). Other interesting anomalies are that the inspection prices in Queensland are the second lowest despite the fact the treatment prices are the second highest. Conversely, the inspection prices in South Australia are the second highest whilst treatment costs are the second lowest.
Despite the downturn in the pre-construction market, more pest managers believe they see the pricing in the pre-construction market increasing (32%) than decreasing (15%). The current average pricing for sheeting perimeter protection was $15.20 per lineal metre but it varied from $5 to $30 (although perhaps $5 was a mistake!). There was less variation between states in pricing that in termite treatments, although Western Australia had the lowest average pricing of $14.20 per lineal metre.