New LDC openings stable in Q4 2020, as COVID-19 interruption fades
The Sector > Economics > New LDC openings stable in Q4 2020, as COVID-19 interruption fades

New LDC openings stable in Q4 2020, as COVID-19 interruption fades

by Jason Roberts

February 08, 2021

The number of long day care (LDC) services that opened in the three months ending December 2020 matched levels seen in the prior quarter, signalling that the interruption created by COVID-19 in Q2 2020 has been contained and that supply growth is on the up according to ACECQA’s latest NQF Snapshot.


A total of 76 new services opened in Q4 2020 compared to Q3 2020, with four of the five larger states recording increases that were broadly similar to those recorded in the previous quarter,and overall levels being maintained relative to the levels seen during the COVID-19 impacted June quarter of 2020.



Across the five larger states South Australia was the standout with zero new LDC services opened in the period. 


On an annualised basis new LDC openings are growing at 3.7 per cent compared to Q4 2019, which is broadly similar to the previous quarters and comfortably within the range of between 3.5 per cent and 4.5 per cent growth recorded in the last three years.



What continues to be of note in this annual series is that the growth rate trends do not show the COVID-19 interruption at all. This is because of the very sizeable jump in new centre openings in the three month period prior to COVID-19 hitting in Q12020. 


That being said, if the Q1 2021, (ie: the current quarter) growth in centres falls materially below last year’s first quarter then we will see annualised growth states step lower. 


From a state perspective the annual growth rates continue to show Victoria as the most active region when it comes to opening new centres with a second quarter of 5.2 per cent annual increases in new centres. 



Both New South Wales and Queensland are showing more modest growth rates at just below 3.0 per cent, a level that is consistent with the last three quarters. 


Family day care records first quarter of growth for three years


The early signs of a stabilisation in family day care (FDC) closures highlighted in previous reports has proved prescient with the setting recording its first quarterly increase in new service approvals issued since 2017, marking the end of an extraordinary period of contraction for the FDC sector. 


Although the overall attendance at FDC services is around 14 per cent* of the total number of children attending LDC centres currently, at its peak it was closer to 33 per cent*. This development may finally signal that the FDC sector has stabilised.. 


In the outside school hours care (OSHC) sector Q4 2020 saw a small increase in new services opened with overall levels consistent with Q3 2020, and in the preschool setting there was a very slight contraction in quarterly openings with the annualised fall in new kindergarten now sitting at 0.4 per cent. 


*Sourced from the Department of Education Quarterly Child Care Report Q1 2020.  

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