Wednesday, October 05, 2011

America's Recession Taking a Bite Out of Dentists' Business

This is according to a study I referenced yesterday.
Dentists are finally feeling some pain from the recession.

Privately held dentist offices (NAICS code 6212) have seen sales so far this year decline about 3 percent after posting ongoing-though-shrinking gains in their top lines throughout the recent recession, Sageworks found in a financial statement analysis of the industry. Sales growth rates for dentists in 2008 and 2009 were 5 percent and 15 percent, respectively, but dipped to 1 percent growth last year before the current year’s decrease, according to the data as shown in the graph.

Profit growth, too, has waned, Sageworks found. Private dentist offices generated a 15 percent increase in net profits in 2009 but have seen profits shrink 3 percent so far this year, according to the analysis of financial statements from the private companies.

Dr. Matthew Messina, a spokesman for the American Dental Association, said in an interview that patients throughout the recession and even today have continued to see dentists for preventive care and for repairs or restorations. It’s the stuff falling between those extremes – the elective services, such as implants or cosmetic dentistry – that is responsible for the recent sales and profit declines, he says.

“When people feel worried…even if they have a job, they might see someone else lose their job…people are reluctant to spend money on things that they view as elective,” Messina said. “That’s what has finally caught up to dentistry.”
Many dental offices have reported a slow down in the last few years. However, I talk to dentists and office administrators, particularly in Southern states that report a booming or expanding business climate.

Certainly, the condition of the industry should be considered on a state by state basis and as a mirror of the state's and local economy.

But, overall, most dentists are complaining of a "down" dental economy.

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