54119 Conveyancing Services in the US Industry Report

Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Good title: The housing market’s revival is expected to stimulate industry growth This report was provided to Seattle Pacific University (2134529962) by IBISWorld on 31 December 2019 in accordance with their license agreement with IBISWorld IBISWorld Industry Report 54119 Conveyancing Services in the US July 2019 Gordon Zheng About this Industry 16 International Trade 29 Technology and Systems Industry Definition 17 Business Locations 29 Revenue Volatility Main Activities Similar Industries 19 Competitive Landscape Additional Resources 19 Market Share Concentration Industry at a Glance 30 Regulation and Policy 31 Industry Assistance 19 Key Success Factors 32 Key Statistics 19 Cost Structure Benchmarks 32 Industry Data 21 Basis of Competition 32 Annual Change Industry Performance 22 Barriers to Entry 32 Key Ratios Executive Summary 23 Industry Globalization 33 Industry Financial Ratios Key External Drivers Current Performance 24 Major Companies 34 Jargon & Glossary Industry Outlook 24 Fidelity National Financial Inc 11 Industry Life Cycle 13 Products and Markets 13 Supply Chain 13 Products and Services 14 Demand Determinants 15 Major Markets 25 First American Financial Corporation 26 Stewart Information Services Corporation 27 Old Republic International Corporation 28 Operating Conditions 28 Capital Intensity www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM About this Industry Industry Definition This industry is composed of companies and legal practitioners that provide conveyancing services to individuals and corporate clients Conveyancing, which is the process of transferring ownership of land or property from one person or entity Main Activities The primary activities of this industry are to another, requires specialists to advise parties, prepare documentation and conduct the settlement process Other industry offerings include arbitration services, expert witness services and assistance with intellectual property claims Real estate settlement services Real estate title abstract services Real estate title search services Title search companies, real estate Paralegal services Patent agent services (i.e., patent filing and searching services) Process server services The major products and services in this industry are Patent copyright and other intellectual property document services Process services Title search and other document filing services Title, abstract and settlement services Other Similar Industries 52412 Property, Casualty and Direct Insurance in the US Operators in this industry directly underwrite insurance policies that protect from loss associated with property and casualty, title and other risks 53132 Real Estate Appraisal in the US Operators in this industry specialize in estimating the fair market value of real estate Appraisers research a property or development to determine the characteristics pertinent to its market value 54111 Law Firms in the US Lawyers may provide expertise in a range of areas or in specific areas of law, including real estate law 54199 Credit Counselors, Surveyors & Appraisers in the US Operators in this industry primarily provide quantity surveyor services, also known as cost estimation; estate appraisal services (except real estate); or consumer credit counseling services Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM About this Industry Additional Resources For additional information on this industry www.alta.org American Land Title Association www.mba.org Mortgage Bankers Association www.nar.realtor National Association of Realtors www.census.gov US Census Bureau IBISWorld writes over 1000 US industry reports, which are updated up to four times a year To see all reports, go towww.ibisworld.com Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   Industry at a Glance Conveyancing Services in 2019 Key Statistics Snapshot Revenue Annual Growth 14–19 Annual Growth 19–24 Profit Wages Businesses $17.7bn 2.8% $2.5bn $5.4bn Existing home sales Revenue vs employment growth Market Share 12 20 First American Financial Corporation  10.1% 10 % change 30 % change Fidelity National Financial Inc 12.8% -10 Stewart Information Services Corporation  3.9% 1.1% 36,040 -3 -20 Year 11 13 15 Revenue 17 19 21 23 25 -6 Year 13 15 17 19 21 23 25 Employment SOURCE: WWW.IBISWORLD.COM Products and services segmentation (2019) 2.1% Patent copyright and other intellectual property document services p 24 5.3% Process services 11.8% Other Key External Drivers Existing home sales Value of private nonresidential construction 15.0% 30-year conventional mortgage rate Title search and other document filing services 65.8% Housing starts Title, abstract and settlement services House price index p SOURCE: WWW.IBISWORLD.COM Industry Structure Life Cycle Stage Revenue Volatility Mature Medium Regulation Level Heavy Technology Change Low Capital Intensity Low Barriers to Entry Low Industry Assistance Low Industry Globalization Low Concentration Level Low Competition Level FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32 Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Medium Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Industry Performance Executive Summary   |   Key External Drivers   |   Current Performance Industry Outlook   |   Life Cycle Stage Executive Summary The Conveyancing Services industry provides specialized legal services to individuals and businesses, generally in the context of property transfers or title disputes Operators offer title searches, document preparation, filing services, arbitration services and assistance with intellectual property claims Rising demand from real estate, increases in the number of housing starts and existing home sales, coupled with overall growth in nonresidential construction, has sparked demand for industry services Overall, industry revenue is expected to increase at an annualized rate of 2.8% to The industry has benefited substantially from surging growth in housing starts $17.7 billion over the five years to 2019, including a projected growth of 1.0% in 2019 alone Industry profit, measured as earnings before interest and taxes, is expected to decline during the fiveyear period Due to the fact that this industry’s performance is closely aligned with the health of the US real estate market, the industry has benefited substantially from surging growth in housing starts Rebounding from a post-recessionary low, housing starts in the United States have increased at an annualized rate of Key External Drivers Existing home sales Existing home sales measure the sale of existent single-family homes, condos and co-ops in a given year The volume of sales is a key measure of demand for homes, which is the single largest asset for many families An increase in the volume of existing home sales boosts demand for conveyancing services and increases industry revenue Existing home sales are expected to increase in 5.0% over the five years to 2019, bolstering the number of homes requiring industry services This trend has been reinforced by the growth in the value of construction, rising an annualized rate of 2.1% during the current period Moreover, the consumer confidence index has increased at a strong annualized rate of 7.5% over the past five years, providing steady downstream demand for operators Although an overall increase in the 30-year conventional mortgage rate has increased the financial burden of homeownership, the strong demand from downstream markets have sustained and increased industry revenue Over the five years to 2024, industry revenue is projected to continue rising, albeit at a slower pace due to slowdowns in economic factors affecting real estate markets Moreover, house prices, as measured by the house price index, are expected to continue rising at an annualized rate of 2.3% after reaching highs during the current period, indicating that homes will become prohibitively expensive for many consumers Tightening lending practices and anticipated increases in mortgage rates are expected to exacerbate industry threats Overall, IBISWorld estimates that industry revenue will increase modestly over the five years to 2024, rising at an annualized rate of 1.1% to $18.6 billion 2019, representing a potential opportunity for the industry Value of private nonresidential construction The value of private nonresidential construction comprises expenditures on office buildings, hospitals, factories and other nonresidential structures Increased demand for nonresidential buildings causes the total number of Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Industry Performance commercial property transactions to increase, which generates demand for conveyancing services The value of private nonresidential construction is projected to increase in 2019 30-year conventional mortgage rate The 30-year fixed rate mortgage is the most common type of loan for home purchases in the United States A decline in mortgage interest rates will increase the level of home sales by making homes more affordable Therefore, as the 30-year conventional mortgage rate increases, industry revenue falls The 30-year conventional mortgage rate is expected to increase in 2019 Housing starts Housing starts measure the number of new privately owned housing units started in a given year The industry benefits from an increase in housing starts because it increases the supply of homes available for purchase, which then require conveyancing services as titles are transferred between parties Housing starts are expected to increase in 2019 House price index The house price index measures trends across the national housing market and adjusts for the quality, size and location of homes An increase in this index indicates that homes are becoming more expensive, which limits real estate activity as many homes become too costly for consumers The house price index is projected to increase in 2019, representing a potential threat to industry operators Value of private nonresidential construction Existing home sales 12 15 10 % change % change Key External Drivers continued -6 -5 -3 Year 13 15 17 19 21 23 25 -10 Year 13 15 17 19 21 23 25 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Industry Performance Surging real estate activity In recent years, the Conveyancing Services industry has continued to recover from its recessionary losses, with revenue expected to rise an annualized 2.8% to $17.7 billion over the five years to 2019; this includes an anticipated 1.0% increase in 2019 The recovery of the US housing and commercial real estate markets have reinvigorated existing home sales, boosting demand for conveyancing services among individual consumers and businesses Similarly, steady improvements in the US financial sector and overall level of corporate profit have driven major corporations to invest more heavily in real estate, as illustrated by growth in the value of nonresidential construction over the past five years As these corporate clients have increasingly engaged in buying and selling properties, demand for title, abstract and settlement services has risen However, industry growth has been somewhat hampered during the period due to steady growth in the house price index Given that everyday individuals constitute an estimated 35.8% of the Conveyancing Services industry’s total customer base, changes in the residential real estate market have a significant influence on industry performance Therefore, a large portion of the industry’s recent growth can be attributed to the dramatic rise in the number of housing starts that occurred over the past five years This figure, which measures the number of new, privately owned housing units started in a given year, has increased at an annualized rate of 5.0% over the five years to 2019, largely as a result of a low post-recessionary base and historically low mortgage rates Similarly, the volume of existing home sales has grown at an annualized rate of 1.8% during the same period, totaling an estimated 5.4 million sales in 2019 As the industry relies on real estate transactions, the Conveyancing Services industry has benefited significantly from surges in home construction and property sales However, growth in the residential real estate market has been hampered by an increasing US house price index This index, which measures changes in housing market prices, has increased at an annualized rate of 5.0% over the five years to 2019, representing a consistent rise in the prices of US homes While a large portion of this increase can be attributed to the housing market’s recovery following the economic downturn, the house price index has already substantially surpassed pre-recessionary peaks As a result, future increases in this index will likely indicate record-high home prices, negatively affecting industry revenue by restricting the number of consumers who can afford to engage in real estate activities Moreover, while the 30-year conventional mortgage rate has fluctuated year-to-year, this figure has exhibited an overall increase in recent years, growing at an annualized rate of 0.5% during the current period This growth makes homeownership relatively expensive, preventing some consumers from investing in real estate and hiring conveyancing service providers Though the commercial real estate market’s revenue has not grown as dramatically as its residential counterpart Industry revenue 20 10 % change Current Performance -10 -20 Year 11 13 15 17 19 21 23 25 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Industry Performance Surging real estate activity continued over the past five years, this sector’s growth has substantially helped providers of conveyancing services Over the five years to 2019, for example, the value of private nonresidential construction has grown at an annualized rate of 0.3%, increasing the number of buildings and properties in need of industry services Moreover, improving economic conditions have yielded steady increases in corporate profit, which has increased at an annualized rate of 2.5% during the current period Strong profit enables downstream companies to invest more heavily in properties and real estate, generating demand for industry services Industry landscape The Conveyancing Services industry’s market share concentration among the major players has risen over the past five years The industry’s four largest players primarily engage in property and direct insurance activities, while also generating industry-relevant revenue from title and escrow services Collectively, these companies account for an estimated 28.8% of total industry revenue in 2019 Most notably, Fidelity National Financial Inc (FNF) has increased its market share through a series of major acquisitions In particular, the company acquired Lender Processing Services Inc in January 2014, which helped boost the company’s industry-relevant revenue while other operators experienced losses due to declining mortgage originations Despite consolidation among the industry’s major players, this industry has a large amount of nonemployer enterprises, and more are expected to enter The total number of industry enterprises is estimated to grow at an annualized rate of 3.0% to 36,040 companies over the five years to 2019 Furthermore, the total value of industry wages is projected to increase an annualized 1.9% to $5.4 billion during the same period Increasing competition Participation in this industry is highly sensitive to changes in its level of demand In 2014, for example, the number of existing home sales declined 2.9% to 4.9 million sales, limiting demand for the industry’s residential title services As a result, industry revenue between 2013 and 2014 decreased 8.1% Even FNF, the industry’s largest player, recorded an industry-relevant profit margin decrease of 3.7% Conversely, when existing home sales rebounded in 2015 with a 6.3% increase, industry revenue also increased a significant 5.6% The industry has experienced steady downstream demand during the current period, encouraging greater competition Over the five years to 2019, the number of industry establishments is expected to increase an annualized 2.8% to 38,764 locations and Participation in this industry is highly sensitive to changes in its level of demand the number of total employees is expected to increase an annualized 2.0% to 109,915 workers These increases cause higher competition, especially among small operators and nonemployers, many of which already have lower profit As a result, the increased participation and employment has negatively affected industry profit Profit, measured as earnings before interest and taxes, is estimated to account for 14.3% of revenue in 2019, down from 17.7% in 2014 Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   WWW.IBISWORLD.COM Industry Performance Industry Outlook Over the five years to 2019, the Conveyancing Services industry experienced strong growth as the housing and construction markets continued to recover from a low post-recessionary base Over the five years to 2024, the industry is projected to experience modest growth as it decelerates and adjusts to more mature growth in construction demand, real estate demand, housing starts and existing home sales Although these markets are Housing market stabilizes Revenue growth is expected to be relatively modest over the next five years as the recovery of the housing market slows For example, whereas the number of housing starts has experienced strong growth in recent years, it is projected to increase at an annualized rate of 2.5% over the five years to 2024, compared with an annualized 5.0% during the current period This means that new, privately owned housing units will be constructed at a more moderate rate in coming years, constraining demand for industry operators that perform research and prepare documents relating to the transfer of these properties Additionally, the number of existing home sales is expected to increase at an annualized rate of 0.9% over the five years to 2024, compared with an annualized 1.8% during the current period At the same time, the 30-year conventional mortgage rate is projected to increase at an annualized rate of 1.1% over the next five years Access to loans and manageable interest rates are crucial to the growth of downstream housing and construction markets Increasing mortgage rates will likely temper demand for homes as they effectively become more expensive to purchase and pay the debt services for, thus repressing industry revenue growth Demand for industry services is highly dependent on real estate activity; therefore, increased nonresidential construction will likely generate significant revenue for operators that specialize in providing conveyancing services to commercial clients Additionally, major corporations are more likely to invest in new properties as their profit increases Therefore, as corporate profit is projected to grow at an annualized rate of 1.4% over the five years to 2024, commercial real estate activity will likely increase, stimulating demand for industry conveyance and title abstract services Increased business activity will further generate demand for other industry services Industry operators also provide patent, copyright and other intellectual property document services Although these services account for a relatively Rising demand from businesses slowing down their growth, there is still growth to be expected Additionally, rising private nonresidential construction and corporate profit over the next five years are expected to generate demand among businesses for industry services Overall, as a result of the general slowing down of major demand drivers, revenue growth is expected to slow over the next five years, anticipated to rise at an annualized rate of 1.1% to $18.6 billion over the five years to 2024 Revenue growth is expected to be relatively modest as the recovery of the housing market slows Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   10 WWW.IBISWORLD.COM Industry Performance Rising demand from businesses continued small proportion of total industry revenue, increasing corporate activity will likely cause revenue from this service segment to increase as corporations Growing industry participation Employment and enterprise figures for this industry are highly sensitive to changes in industry profitability, since most participants are small operators that cannot remain in business when changes in the housing market and corporate spending cause profit to contract In recent years, industry profit, defined as earnings before interest and taxes, was slightly volatile, yielding surges in industry participation during periods of high profitability and swift declines in participation when profit decreased Over the five years to 2024, industry profit is forecast to remain invest more heavily in new marketing and product development activities that require patent copyright and other document filing Industry profitability has been somewhat volatile relatively constant, stagnating at 14.3% of revenue between 2019 and 2024 The number of operators in the Conveyancing Services industry is expected to increase consistently at an annualized 1.7% to 39,272 companies Total industry employment is also expected to experience modest growth during the outlook period, rising at an annualized rate of 1.2% to 116,396 workers Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   21 Competitive Landscape Cost Structure Benchmarks continued as downstream demand for both residential and nonresidential construction expands Depreciation This not a capital-intensive industry, the depreciation of capital assets accounts for a relatively small portion of total industry revenue In 2019, depreciation is expected to account for just 1.1% of industry revenue Marketing Over the five years to 2019, marketing costs have stayed low, it is estimated to represent 1.3% of total revenue in 2019 This amount is not expected to change much due to the mature stage of its industry life cycle The industry services are already well understood and accepted by society Basis of Competition Level & Trend  ompetition C in this industry is Mediumand the trend is S  teady closings, major companies in this industry typically require a large number of geographically dispersed establishments to maximize revenue Most operators rent the space they work out of Operators tend to rent spaces in prime locations to best appeal to their higher income consumer base This causes service industry rent to be relatively more expensive than for manufacturing or wholesaling industries Utilities Over the five years to 2019, utilities costs have remained steady at 0.1% of total industry revenue Utilities include water, electric, internet access and transportation Rent In 2019, IBISWorld estimates that expenses on rent will account for 4.6% of total industry revenue Due to the localized nature of title searches and Other Combined, other costs account for 47.0% of industry revenue is composed of a variety of expenses, including professional fees, courier services, travel expenses, insurance premiums, legal fees, cleaning services and other administrative costs Internal competition Competition among participants in the Conveyancing Services industry is primarily based on the relative price of each operator’s services, the quality of services provided and each operator’s geographic location For instance, as a result of the falling profit that followed the industry’s recessionary decline, industry operators have increasingly employed competitive pricing tactics to remain profitable Guarantees such as “No Completion, No Fee”, in which service users are not charged solicitors’ fees if the sale or purchase falls through, have become more common within the industry However, the ability to brand services in this way is typically limited to larger industry operators, as they are better positioned to hedge against potential losses from such guarantees Competition also occurs based on the range and quality of services a company provides Some clients need a broad range of services beyond conveyancing and document preparation, such as insurance and general legal counsel As a result, larger companies that operate a variety of insurance, legal and conveyancing divisions internally are at a competitive advantage in this industry, even if the revenue generated through these supplementary activities is not reflected in the company’s industry-relevant revenue Operators also compete based on the quality of their services, as developing a reputation for providing excellent, reliable service has become essential for operators Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   22 Competitive Landscape Basis of Competition continued in the real estate market, where clients are often hesitant and skeptical Internal competition is also based on geographic location Most industry operators specialize in the transfer of houses and commercial properties in their area These operators benefit from substantial location-specific advantages, such as a better understanding of the region’s laws and real estate regulations As a result, the industry is highly fragmented and geographically dispersed, and the majority of industry establishments are non-employers However, larger players tend to cluster near major real estate markets, generating intense internal competition in regions such as the Mid-Atlantic Barriers to Entry An operator hoping to enter the Conveyancing Services industry must be familiar with the regulatory environment of the state in which it plans to operate New industry participants must keep up to speed with all government regulations and disclosures so that fraud and unnecessary settlement costs are avoided when transferring a title from one party to another However, while regulations and other legal requirements serve as a moderate barrier to entry for industry operators, these regulations have also caused the market to become highly fragmented among a multitude of small companies Complex regulations that vary from state to state make it difficult for large companies to expand their operations across the entire country New entrants would experience limited competition from major players that dominate the industry However, some clients require an operator with specialized knowledge and substantial resources, which acts as a barrier to success for certain small-scale operators For example, large corporate clients engaged in the transfer of various Level & Trend  arriers to Entry B in this industry are Lowand S  teady External competition The primary source of external competition for the industry comes from operators in the Law Firms industry (IBISWorld report 54111), which often prepare legal documents and represent clients involved in property transfers However, outside competition from law firms is generally limited by the specialized and niche nature of the services provided by the Conveyancing Services industry Additionally, industry operators compete with players in the Property, Casualty and Direct Insurance industry (IBISWorld report 52412) that provide escrow services and insurance policies Barriers to Entry checklist Competition Concentration Life Cycle Stage Capital Intensity Technology Change Regulation and Policy Industry Assistance Medium Low Mature Low Low Heavy Low SOURCE: WWW.IBISWORLD.COM commercial properties often require conveyancing companies with greater scale to meet their needs As a result, smaller operators seeking to enter this industry will likely be limited to servicing individual consumers and small and medium enterprises This industry is not capital intensive and significant start-up capital is not required As a result, capital expenditure on technology and systems does not present a significant barrier to entry However, while a new competitor in the market may not encounter significant financial obstacles, success can be hampered by a lack of brand recognition, Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   Competitive Landscape Barriers to Entry continued technology and software knowledge and reputation As many consumers and corporations have become more skeptical of the real estate market in recent years, having a reputation of excellence and integrity has become an increasingly important prerequisite for obtaining work as a conveyancer Industry Globalization The Conveyancing Services industry primarily serves the US domestic market For example, while First American Financial Corporation offers services either directly or through joint ventures in over 70 countries, only 6.2% of the company’s industry-relevant revenue came from international operations in 2019 Moreover, each of the industry’s four largest players are domestically listed and majorityowned by US shareholders As a result, the industry exhibits a low level of globalization Level & Trend  lobalization G in this industry is L owand the trend is S  teady Provided to: Seattle Pacific University (2134529962) | 31 December 2019 23 Conveyancing Services in the USJuly 2019   24 WWW.IBISWORLD.COM Major Companies Fidelity National Financial Inc | First American Financial Corporation Stewart Information Services Corporation | Other Companies Major Players (Market Share) First American Financial Corporation 10.1% 73.2% Other Stewart Information Services Corporation 3.9% Fidelity National Financial Inc 12.8% Player Performance Fidelity National Financial Inc Market Share: 12.8% Industry Brand Names Fidelity National Title Chicago Title Commonwealth Land Title Alamo Title SOURCE: WWW.IBISWORLD.COM Fidelity National Financial Inc (FNF) is a provider of claims management, information services and title and specialty insurance FNF is one of the nation’s largest providers of title insurance policies The company’s title insurance underwriters include Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title and Alamo Title Operating through a variety of underwriters, the company distributes its products through its 1,400 residential title offices, relying on more than 5,200 independent agents nationwide FNF’s subsidiaries also provide information services and software to the financial services and real estate markets In 2018, FNF generated $7.6 billion in total revenue (latest data available) FNF operates in two segments: title; corporate and other The title segment offers insurance, escrow and other title-related services including trustee sales guarantees, trust activities, recordings and reconveyances and home warranty and products While FNF generates most of its revenue through the provision of title insurance services, revenue from title insurance operations is not applicable to the Conveyancing Services industry Many services contributing to industry revenue are provided in conjunction with title insurance Over the five years to 2019, FNF has made several major acquisitions to increase its presence across various industries In 2017, for example, FNF acquired a 90.0% share of Title Guaranty of Hawaii, Hawaii’s oldest provider of title and escrow services, for $98.0 million Most recently, FNF is attempting to acquire one of its largest competitors, Fidelity National Financial Inc (US industry-specific segment) - financial performance* Year Revenue ($ million) (% change) Operating Income ($ million) (% change) 2014 2015 1,855 6.8 138.3 -28.6 2,246 21.1 259.5 87.6 2016 2,416 7.6 331.3 27.7 2017 2,637 9.1 297.3 -10.3 2018 2,615 -0.8 258.3 -13.1 2019 2,259.56 -13.6 210.8 -18.4 *Estimates SOURCE: ANNUAL REPORT AND IBISWORLD Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   25 WWW.IBISWORLD.COM Major Companies Player Performance continued Stewart Information Services Corporation, for $1.2 billion, pending approval by the New York Department of Financial Services This deal is expected to close by the end of 2019 and create operational efficiencies to save costs for both companies Player Performance First American Financial Corporation Market Share: 10.1% Financial performance Over the five years to 2019, FNF’s industry-relevant revenue is estimated to increase at an annualized rate of 4.0% to $2.3 billion While growth is primarily driven by surges in downstream construction and housing markets, a portion of this growth has also been achieved through acquisitions As an example, revenue grew a substantial 21.1% in 2015 alone due to an increase in downstream markets More recently, the company’s industry-relevant revenue has increased at a relatively modest pace as the value of existing home sales and the total value of US construction activity have experienced slowed but stable growth In addition, FNF has also benefited from relatively strong profit in recent years, with the company’s industry-relevant operating income projected to increase at an annualized rate of 8.8% to $210.8 million over the five years to 2019 First American Financial Corporation (FAF) was incorporated in 2010 to serve as the holding company for the First American Corporation’s financial services business The company has a history dating back to 1894, when two entities were merged to become the Orange County Title Company This enterprise was then renamed First American Title Insurance in 1960, as operations expanded beyond Orange County In 2010, the company separated its real estate and title insurance operations, creating two entirely new companies Currently, FAF specializes in insurance and settlement services, while the company’s property information and analytics businesses are managed by CoreLogic Inc In 2018, FAF employed more than 18,251 workers and generated total revenue of $5.7 billion (latest data available) FAF operates in the Conveyancing Services industry through its title insurance and services segment, which is involved in providing title insurance First American Financial Corporation (US industry-specific segment) financial performance* Year Revenue ($ million) (% change) Operating Income ($ million) (% change) 2014 2015 1,627.7 -5.7 141.1 7.6 1,805.7 10.9 184.8 31 2016 1,886.2 4.5 220 19 2017 1,915 1.5 232.4 5.6 2018 1,937.1 1.2 240.2 3.3 2019 1,786.8 -7.8 246.7 2.7 *Estimates SOURCE: ANNUAL REPORT AND IBISWORLD Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   26 WWW.IBISWORLD.COM Major Companies Player Performance continued Player Performance Stewart Information Services Corporation Market Share: 3.9% policies on residential and commercial property In 2018, this segment accounted for an estimated 91.9% of total company revenue (latest data available) While title insurance policies are not included in the scope of the Conveyancing Services industry, revenue generated from closing and escrow services is included Additionally, FAF offers tax-deferred exchanges of real estate, maintenance and management of title plant records and images, in addition to banking, trust and investment advisory services The company also operates internationally, though revenue derived from international operations accounted for just 5.6% of this segment’s revenue in 2018 (latest data available) Over the five years to 2019, FAF has made several acquisitions to increase its assets and expand its reach across several industries In both 2016 and 2017, FAF spent an aggregate $91.1 million and $115.3 million, respectively, on acquisitions, specifically to strengthen its title insurance and services segment Stewart Information Services Corporation (Stewart) is a leading title insurance and real estate service provider in the United States The company is based in Houston and employs an estimated 5,960 employees across more than 80 countries Services are offered to home buyers and sellers; residential and commercial real estate professionals; and mortgage lenders and servicers Stewart also maintains operations in Canada, the United Kingdom, Central Europe, Central Financial performance FAF’s industry-relevant revenue is projected to increase at an annualized rate of 1.9% over the five years to 2019, reaching $1.8 billion in 2019 Revenue for the company’s title and insurance services segment declined in 2014, as a drop in the sale of existing homes led to a decrease in demand for industry services However, FAF was quick to recover, as the company’s industryrelevant revenue has grown in each subsequent year Furthermore, the company has also benefited from increased profit in recent years, with FAF’s industry-relevant operating income estimated to grow at an annualized rate of 11.8% to $246.7 million over the five years to 2019 Stewart Information Services Corporation (US industry-specific segment) - financial performance* Year Revenue ($ million) 2014 756.7 2015 849.5 2016 842.0 2017 2018 2019 *Estimates Operating Income ($ million) (% change) 5.5 21.0 -44.1 12.3 36.9 75.7 -0.9 36.9 0.0 804.8 -4.4 30.9 -16.3 780.9 -3.0 30.0 -4.0 680.0 -12.9 17.51 -41.0 (% change) SOURCE: ANNUAL REPORT AND IBISWORLD Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   27 WWW.IBISWORLD.COM Major Companies Player Performance continued America and Australia In 2018, the company generated $1.9 billion in total revenue (latest data available) Stewart operates through two major segments: title insurance and related services and ancillary services and corporate The company participates in the Conveyancing Services industry through its title insurance and related services segment, which specializes in examining titles to determine the ownership of the property being transferred, understanding the scope of a particular policy’s coverage and ascertain if any debts are owed This is also the company’s largest operational segment Stewart’s remaining operations primarily involve assisting with loss mitigation and providing post-closing services to residential mortgage lenders In March 2018, Fidelity National Financial Inc (FNF) announced it was set to purchase Stewart for $1.2 billion The deal is expected to close by the end of 2019, pending the approval by the New York Department of Financial Services However, if the acquisition is not completed because of regulation failures, FNF will pay Stewart a reverse break-up fee of an estimated $50.0 million The acquisition is expected to create a title insurance giant, permitting the combined company to benefit from significant market share and expanded profit Financial performance Over the five years to 2019, Stewart’s industry-relevant operations have experienced stable growth early during the period; however, the company has contended with revenue declines after 2016 Early growth can be attributed to significant acquisition activity More recently, a sharp decline in the number of closed orders, primarily in refinancing and commercial orders, is projected to cause the company’s direct title revenue to decline after 2016 Overall, Stewart’s industry-relevant revenue is expected to decrease at an annualized rate of 2.1% to $680.0 million over the five years to 2019 Due to significant volatility in Stewart’s industry-relevant operating income, profit has fluctuated substantially The overall decrease in earnings has been driven by increased employee costs, a lower agency remittance rate and higher title loss expenses as a percent of title revenue Over the five years to 2019, it is estimated that operating income will decrease at an annualized rate of 3.5% to $17.5 million Other Company Performance Old Republic International Corporation (Old Republic) is a provider of insurance underwriting in the United States The company was founded in 1923 and is currently headquartered in Chicago Old Republic provides general insurance for automobiles, aviation and both residential and commercial buildings In 2018, the company employed an estimated 9,000 individuals and generated $6.0 billion in total revenue (latest data available) Old Republic operates through three major segments including the general insurance group (property and liability insurance), the title insurance group and the republic financial indemnity group (mortgage guaranty and consumer credit indemnity) The company participates in the Conveyancing Services industry through its title insurance group This segment’s business involves the issuing of policies to real estate purchasers and investors based on searches of public records Policies are then insured against losses from defects, liens and other problems with the insured title In 2019, Old Republic is projected to earn $421.1 million in industry-relevant revenue Old Republic International Corporation Market Share: 2.4% Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   28 WWW.IBISWORLD.COM Operating Conditions Capital Intensity   |   Technology & Systems   |   Revenue Volatility Regulation & Policy   |   Industry Assistance Capital Intensity Level The level of capital intensity is L ow The Conveyancing Services industry is highly labor intensive, as the majority of work involves employees conducting title searches, preparing documentation, liaising with clients and meeting with representatives of various parties Moreover, there are no significant capital investments that an operator must make to be competitive, and industry-relevant capital expenditures are generally limited to software, data processing systems and personal computers As a result, the typical industry operator is expected to spend just $0.04 on capital investments for every dollar spent on labor in 2019 Over the five years to 2024, the industry will rely more heavily on capital as operators increasingly use computer Capital Intensity Capital units per labor unit 0.5 0.4 0.3 0.2 0.1 0.0 Economy Professional, Conveyancing Scientific and Services Technical Services Dotted line shows a high level of capital intensity SOURCE: WWW.IBISWORLD.COM software and more advanced technologies to complete jobs However, the ratio of labor to capital will likely remain steady Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   29 WWW.IBISWORLD.COM Operating Conditions Capital Intensity continued at 2019 values in coming years, as it is unlikely that this industry will ever have high capital investment requirements Technology and Systems The Conveyancing Services industry exhibits a low level of technology change. The only major technological change that has occurred within the Conveyancing Services industry in recent years has been the proliferation of online title searches For example, First American Financial Corporation’s FAST Transaction System centralizes company operations by providing an internetbased search Most of the technology used by industry operators comes in the form of data processing software and communication equipment Given that this industry has a low level of capital intensity, it is unlikely that innovation in these technologies will radically alter the industry landscape operationally over the five years to 2024 At the same time, the increased number of services available online could signal a shift away from the industry’s traditional reliance on manual labor, especially as major players cut down staff levels in response to substantial volatility in the US housing market For instance, Stewart Information Services Corporation has invested in internetbased technology, which enables customers to interact directly with its SureClose and AIM title production systems Before such technology existed, multiple employees were required to search for a title, review the documents and create a policy Innovations such as these could help lower labor intensity and increase operational efficiency moving forward The Conveyancing Services industry has exhibited a moderate level of revenue volatility over the five years to 2019 Industry revenue is highly sensitive to changes in the US housing market, with most industry operators experiencing strong demand for conveyancing services during periods of high home ownership and rising levels of construction activity Over the five years to 2024, industry revenue is expected to grow more smoothly as the number of existing home sales and housing starts are projected to experience consistent growth, at annualized rates of 0.9% and 2.5%, respectively Level The level of technology change is L ow Revenue Volatility Level The level of volatility is M  edium Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   30 WWW.IBISWORLD.COM Operating Conditions Revenue Volatility continued Regulation and Policy Level & Trend  he level of T Regulation is Heavyand the trend is S  teady Regulations in the Conveyancing Services industry differ among states, depending on local legal requirements and historical practice This has fragmented the industry somewhat, as many players are forced to operate several small independent offices across the country that can adhere to each state’s particular legal code This structure makes it more difficult for major players to benefit from economies of scale and capture significant market share In the case of property transfers (conveyancing), an attorney or licensed escrow agent represents each buyer, seller and mortgage holder involved in the deal In passing papers, legal representatives affect the transaction on behalf of their clients Each state has different rules for how this deal must be affected; for example, not all states require every party to be present simultaneously In most states, an offer is made in the form of a written contract (bound with a deposit on the purchase price) that sets out the instances in which an offer can be withdrawn without forfeiting the deposit Upon meeting these conditions, the buyer is granted equitable title Real Estate Settlement Procedures Act (1975) This act was introduced to improve the regulatory environment for the real estate industry, primarily to protect consumers with regard to settlement fees and costs The purpose of the Real Estate Settlement Procedures Act is to eliminate kickbacks and referral fees that unnecessarily increase the cost of certain settlement services It aims to accomplish this by providing consumers with the relevant disclosure throughout the closing process For instance, Section of the act prohibits a person from giving or accepting anything of value for referrals of settlement service related to a federally related mortgage loan It also prohibits a person from giving or accepting any part of a charge for services that are not performed HUD-1 Settlement Statement The HUD-1 Settlement Statement is a standard form that clearly shows all charges imposed on borrowers and sellers in connection with the settlement The Real Estate Settlement Procedures Act enables the borrower to request to see the HUD-1 Settlement Statement one day before the actual settlement The settlement agent Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   31 WWW.IBISWORLD.COM Operating Conditions Regulation and Policy continued Industry Assistance Level & Trend  he level of T Industry Assistance is L owand the trend is S  teady must then provide the borrowers with a completed HUD-1 Settlement Statement based on information known to the agent at that time Title Standards 2001 The Title Standards act as a guide for the preparation of title evidence for all land acquisitions made by the US government, including acquisitions made by exchange, direct purchase, donation and condemnation Title Standards 2001 is used in every state except Texas, which has a more rigid regulatory environment Operators in the Conveyancing Services industry receive no formal government assistance However, as industry operators are often legal practitioners, they receive some support from legal associations such as the American Bar Association (ABA) Founded in 1878, the ABA is a voluntary bar association of over 400,000 member lawyers and law students, which is not specific to any jurisdiction in the United States In 2012, the ABA released the Best Practice Guidelines for Legal Document Service Providers, which outlines best practices for individuals and entities that operate outside the lawyer-client relationship These guidelines aim to support companies that provide materials and services for the creation of legal documents that are intended to express or affect legal rights, obligations, claims or positions These recent guidelines supplement the Best Practice Guidelines for Legal Information Website Providers, which describe general best practices within the industry, including keeping clients informed about the times and dates when important documents are reviewed and the jurisdiction of those documents, in addition to the relevant terms and conditions of use Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   32 Key Statistics Industry Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Sector Rank Economy Rank Industry Value Added ($m) 6,501.1 6,367.9 7,712.9 8,694.7 7,776.9 7,426.5 8,255.9 7,895.0 8,016.5 8,100.6 8,150.1 8,221.7 8,347.5 8,467.9 8,560.7 18/35 290/694 Establishments 30,569 30,237 33,576 34,916 33,710 35,329 35,986 37,033 37,857 38,764 39,348 39,909 40,731 41,453 42,141 23/35 171/694 Enterprises Employment 28,025 96,406 27,743 93,120 30,801 111,526 32,690 119,049 31,049 99,786 32,772 100,743 33,393 103,705 34,364 106,500 35,157 108,188 36,040 109,915 36,612 110,660 37,143 111,418 37,928 113,221 38,614 114,926 39,272 116,396 23/35 21/35 160/694 283/694 Exports -N/A N/A Revenue (%) -4.9 15.4 8.1 -8.1 5.6 3.4 2.8 1.3 1.0 0.6 0.9 1.5 1.4 1.1 31/35 427/694 Industry Value Added (%) -2.0 21.1 12.7 -10.6 -4.5 11.2 -4.4 1.5 1.0 0.6 0.9 1.5 1.4 1.1 31/35 445/694 Establishments (%) -1.1 11.0 4.0 -3.5 4.8 1.9 2.9 2.2 2.4 1.5 1.4 2.1 1.8 1.7 14/35 155/694 Enterprises Employment (%) (%) -1.0 -3.4 11.0 19.8 6.1 6.7 -5.0 -16.2 5.5 1.0 1.9 2.9 2.9 2.7 2.3 1.6 2.5 1.6 1.6 0.7 1.5 0.7 2.1 1.6 1.8 1.5 1.7 1.3 13/35 28/35 139/694 303/694 Exports (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IVA/Revenue (%) 46.07 47.44 49.80 51.92 50.51 45.69 49.14 45.72 45.84 45.87 45.87 45.85 45.87 45.91 45.91 22/35 165/694 Imports/ Demand (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Revenue ($m) 14,112.5 13,422.6 15,487.3 16,747.6 15,398.0 16,253.5 16,802.0 17,270.0 17,487.1 17,658.5 17,766.2 17,933.3 18,198.7 18,445.4 18,645.6 17/35 408/694 Annual Change 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Sector Rank Economy Rank Key Ratios 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Sector Rank Economy Rank Exports/ Revenue (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Revenue per Employee ($’000) 146.39 144.14 138.87 140.68 154.31 161.34 162.02 162.16 161.64 160.66 160.55 160.96 160.74 160.50 160.19 18/35 486/694 Wages/Revenue (%) 31.07 32.34 35.30 35.32 31.71 30.89 30.24 30.22 30.29 30.44 30.46 30.40 30.43 30.47 30.51 27/35 159/694 Existing house sales (Mil) 4.2 4.3 4.7 5.1 4.9 5.3 5.5 5.5 5.3 5.4 5.5 5.5 5.6 5.6 5.7 N/A N/A Imports -N/A N/A Wages ($m) 4,384.2 4,341.0 5,467.2 5,914.7 4,882.0 5,021.0 5,080.4 5,218.2 5,297.5 5,375.5 5,411.2 5,451.1 5,537.8 5,619.5 5,689.2 18/35 274/694 Domestic Demand N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Imports (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Wages (%) -1.0 25.9 8.2 -17.5 2.8 1.2 2.7 1.5 1.5 0.7 0.7 1.6 1.5 1.2 29/35 340/694 Domestic Existing Demand house sales (%) (%) N/A 2.4 N/A 9.3 N/A 8.5 N/A -3.9 N/A 8.2 N/A 3.8 N/A 0.0 N/A -3.6 N/A 1.9 N/A 1.9 N/A 0.0 N/A 1.8 N/A 0.0 N/A 1.8 N/A N/A N/A N/A Employees per Est 3.15 3.08 3.32 3.41 2.96 2.85 2.88 2.88 2.86 2.84 2.81 2.79 2.78 2.77 2.76 18/35 567/694 Figures are in inflation-adjusted 2019 dollars Rank refers to 2019 data Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Average Wage ($) 45,476.42 46,617.27 49,021.75 49,682.90 48,924.70 49,839.69 48,988.96 48,997.18 48,965.69 48,905.97 48,899.33 48,924.77 48,911.42 48,896.68 48,877.97 23/35 397/694 Share of the Economy (%) 0.04 0.04 0.05 0.05 0.05 0.04 0.05 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 18/35 290/694 SOURCE: WWW.IBISWORLD.COM WWW.IBISWORLD.COM Conveyancing Services in the US July 2019   Industry Financial Ratios Apr 2014 Mar 2015 Apr 2015 Mar 2016 Apr 2016 Mar 2017 Apr 2017 Mar 2018 Apr 2017 - Mar 2018 by company revenue Small Medium Large ($50m) Liquidity Ratios Current Ratio Quick Ratio Sales / Receivables (Trade Receivables Turnover) Days’ Receivables Cost of Sales / Inventory (Inventory Turnover) Days’ Inventory Cost of Sales / Payables (Payables Turnover) Days’ Payables Sales / Working Capital 2.2 1.8 1.3 1.2 1.5 1.4 1.6 1.3 1.4 1.4 2.0 1.7 1.2 1.0 10.4 22.3 25.2 38.2 262.9 46.4 10.7 35.1 n/c n/a 17.3 21.1 9.7 16.4 n/c n/a 22.0 16.6 26.7 14.5 n/c 0.4 20.5 17.8 16.0 9.6 n/c 0.4 18.3 19.9 17.2 1.4 n/c 0.4 40.5 9.0 32.6 7.9 n/c 0.4 14.8 24.7 8.9 34.1 n/c 0.4 11.1 32.9 47.1 19.7 10.2 14.0 15.0 12.7 49.7 1.9 n/a n/a n/a n/a n/a n/a n/a 0.3 1.5 20.9 0.6 3.6 18.4 0.5 1.9 16.6 0.4 2.6 24.5 0.3 1.9 32.1 0.2 1.2 34.1 -0.3 -1.9 -8.2 53.0 13.3 36.0 2.1 34.7 12.8 48.3 3.0 48.0 15.9 41.8 2.9 44.6 20.3 54.5 3.1 45.9 22.6 119.8 3.2 43.5 20.4 77.6 3.3 n/a 4.0 24.4 0.7 74.5 12.5 9.7 1.6 5.7 13.7 67.8 8.9 6.7 1.0 2.3 8.3 61.7 8.7 6.5 3.1 4.6 10.2 67.9 9.7 9.4 2.5 8.4 20.4 61.3 6.4 10.5 2.8 7.9 18.2 71.2 10.2 7.4 2.3 29.7 28.1 n/a n/a n/a n/a n/a n/a 23.8 25.9 1.2 9.2 60.2 13.5 12.9 13.4 100.0 1,153.7 25.4 23.1 1.4 4.0 53.9 14.7 12.2 19.3 100.0 1,134.4 26.8 22.0 0.5 6.0 55.3 16.7 14.4 13.6 100.0 1,369.5 28.5 16.4 0.2 9.2 54.3 12.5 18.1 15.1 100.0 1,286.5 28.3 15.0 0.3 13.2 56.9 18.2 14.4 10.4 100.0 43.7 35.3 20.1 n/a 8.2 63.6 7.0 10.8 18.6 100.0 189.0 16.3 12.6 0.1 3.2 32.2 11.1 38.7 18.0 100.0 1,053.8 8.8 1.5 6.5 n/a 16.7 33.5 15.0 0.6 17.1 33.8 1,153.7 6.1 2.4 9.2 0.5 30.1 48.2 11.6 0.4 9.2 30.6 1,134.4 7.5 2.2 7.7 0.2 17.2 34.9 24.6 0.1 9.4 31.0 1,369.5 7.3 2.4 7.9 0.1 18.2 35.9 17.8 n/a 3.8 42.6 1,286.5 15.3 0.9 9.2 0.3 14.1 39.8 13.1 n/a 0.5 46.5 43.7 2.0 3.8 7.6 n/a 25.5 39.0 13.8 0.1 2.3 44.9 189.0 0.9 2.7 5.8 n/a 12.9 22.3 34.2 n/a 12.9 30.5 1,053.8 52 58 59 53 22 20 11 Coverage Ratios Earnings Before Interest & Taxes (EBIT) / Interest Net Profit + Dep., Depletion, Amort / Current Maturities LT Debt Leverage Ratios Fixed Assets / Net Worth Debt / Net Worth Tangible Net Worth Operating Ratios Profit before Taxes / Net Worth, % Profit before Taxes / Total Assets, % Sales / Net Fixed Assets Sales / Total Assets (Asset Turnover) Cash Flow & Debt Service Ratios (% of sales) Cash from Trading Cash after Operations Net Cash after Operations Cash after Debt Amortization Debt Service P&I Coverage Interest Coverage (Operating Cash) Assets, % Cash & Equivalents Trade Receivables (net) Inventory All Other Current Assets Total Current Assets Fixed Assets (net) Intangibles (net) All Other Non-Current Assets Total Assets Total Assets ($m) Liabilities, % Notes Payable-Short Term Current Maturities L/T/D Trade Payables Income Taxes Payable All Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Taxes All Other Non-Current Liabilities Net Worth Total Liabilities & Net Worth ($m) Maximum Number of Statements Used 33 Source: RMA Annual Statement Studies, rmahq.org RMA data for all industries is derived directly from more than 260,000 statements of member financial institutions’ borrowers and prospects Note: For a full description of the ratios refer to the Key Statistics chapter online Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Conveyancing Services in the USJuly 2019   34 WWW.IBISWORLD.COM Jargon & Glossary Industry Jargon CLOSINGThe final stages in the transfer of property IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry CONVEYANCINGThe act or business of transferring land or property from one party to another CAPITAL INTENSITYCompares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor CONSTANT PRICESThe dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e year published) as the base year This removes the impact of changes in the purchasing power of the dollar, leaving only the “real” growth or decline in industry metrics The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator HOUSING STARTSThe number of new homes under construction INDUSTRY REVENUEThe total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded INDUSTRY VALUE ADDED (IVA)The market value of goods and services produced by the industry minus the cost of goods and services used in production IVA is also described as the industry’s contribution to GDP, or profit plus wages and depreciation INTERNATIONAL TRADEThe level of international trade is determined by ratios of exports to revenue and imports to domestic demand For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20% Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35% EMPLOYMENTThe number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry LIFE CYCLEAll industries go through periods of growth, maturity and decline IBISWorld determines an industry’s life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry’s products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services ENTERPRISEA division that is separately managed and keeps management accounts Each enterprise consists of one or more establishments that are under common ownership or control NONEMPLOYING ESTABLISHMENTBusinesses with no paid employment or payroll, also known as nonemployers These are mostly set up by self-employed individuals ESTABLISHMENTThe smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed Multiple establishments under common control make up an enterprise PROFITIBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability It is calculated as revenue minus expenses, excluding interest and tax DOMESTIC DEMANDSpending on industry goods and services within the United States, regardless of their country of origin It is derived by adding imports to industry revenue, and then subtracting exports EXPORTSTotal value of industry goods and services sold by US companies to customers abroad IMPORTSTotal value of industry goods and services brought in from foreign countries to be sold in the United States INDUSTRY CONCENTRATIONAn indicator of the dominance of the top four players in an industry Concentration is considered high if the top players account for more than 70% of industry revenue Medium is 40% to 70% of industry revenue Low is less than 40% VOLATILITYThe level of volatility is determined by averaging the absolute change in revenue in each of the past five years Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3% WAGESThe gross total wages and salaries of all employees in the industry The cost of benefits is also included in this figure Provided to: Seattle Pacific University (2134529962) | 31 December 2019 www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com At IBISWorld we know that industry 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Conveyancing Services in the US July 2019   12 WWW.IBISWORLD.COM Industry Performance Industry Life Cycle This industry is M  ature The Conveyancing Services industry is? ?in? ?the mature stage... of changes in the purchasing power of the dollar, leaving only the “real” growth or decline in industry metrics The inflation adjustments in IBISWorld’s reports are made using the US Bureau of... to increase in 2019 Housing starts Housing starts measure the number of new privately owned housing units started in a given year The industry benefits from an increase in housing starts because