Uncertain Economy? A Thoughtful Look Ahead at the Market for Veterinary Services

by | Jun 1, 2025 | Animal Health Industry - Views, Views

Uncertain Economy

After a nice post-pandemic run, a bit of uncertainty crept into the U.S. stock market near the end of 2021, resulting in a somewhat turbulent time for most of the following year. In fact, the widespread concern about a potential looming recession during 2022 prompted me to write about such economic downturns and their possible impacts on Veterinary medicine late that year.1 Fortunately, both the economy and the stock market settled into a nice growth pattern and major concerns were abated – at least for a couple years. Then came November 2024.

Clearly, the uncertain economy we are experiencing fits perfectly into Covey’s model of “Circle of Concern vs Circle of Influence”.2 Even though the situation is of great concern, there’s not much we can do as individuals to influence national policy on tariffs, taxes, interest rates, immigration, etc. Our task is to work diligently to navigate whatever economic white water we encounter in the short run, possibly including recession, while positioning ourselves for sustained success in the long run. With this in mind, a thoughtful moment of reflection makes sense.

First, it is helpful to review the possible impacts of recession on Veterinary medicine as addressed previously.1 From that publication, key points that warrant mention here include:

  • Economic cycles of growth and recession are a long-standing characteristic of the U.S. economy. Since the middle of the 20th century, recessions have occurred on average about once every six years, varying in length – usually about 11 months, though the Great Recession lasted 18 but the Covid recession in 2020 lasted only two.
  • Historical data indicate that in Veterinary medicine, recession has been associated with a softening of demand for services nationally, although proportionately less impact than the corresponding decline in the general economy. “Softening” in this context means that some local/regional markets likely experience little-to-no impact, while others experience a more substantial dip.
  • Data also suggest a “softening” of both starting salaries and average veterinarian incomes was associated with the Great Recession. In contrast, similar impact has not been clearly established for other economic downturns and remarkably, meaningful unemployment has never been documented in Veterinary medicine.

Because recessions are generally short-lived, progressive management of operations becomes a critical determinant of related short-term success. In the greater scheme, though, it is vital to consider long-term trends and develop strategies to navigate for the long haul.

Research conducted at Michigan State University3 and the University of Florida4 highlights the strong economic fundamentals of the U.S. market for pet Veterinary services. Mean quarterly expenditures per household for Veterinary service users (corrected for inflation) increased at an average compounded rate of +2.9% per year from 1980 through 2018. And since 2010, the proportion of pet-owning households reporting expenditures on Veterinary service increased at a compounded rate of +1.7% per year. When considered with data from the American Pet Products Association indicating consistent, long-term growth in the total number of pet-owning households in the U.S.,5 the solid pillars of demand for pet healthcare are apparent. So, potential recession notwithstanding, the long-term outlook for Veterinary medicine is bullish.

In the long-term, however, a more concerning trend relates to the increasing challenges that millions of pet owners face in achieving adequate access to Veterinary services.6 Central to this issue is the rising cost of Veterinary service, which is directly associated with the longstanding shortage of veterinarians.7 As prices continue to increase, a growing proportion of pet-owning households are no longer able to fully access Veterinary care financially. Studies suggest that these consequences are likely to have a disproportionate impact on pet owners in cultural, socioeconomic, and geographic communities that all-too-often have experienced marginalization in our society. This is where the shortage of veterinarians is being felt the most; distribution of the negative impact is not equal across all pet-owning communities.

From a glass-half-full perspective, the ongoing, long-term growth of this underserved market and its not-fully-met demand for Veterinary services represent an increasing opportunity for non-traditional, innovative models for pet healthcare delivery. Already, an assortment of viable businesses with creative portfolios of services and products and affordable pricing structures is emerging – targeted for underserved segments of the pet-owning community. Going forward, these strategies are likely to include:

  • Expanded use of technology, such as telemedicine and AI.
  • Increased delegation of clinical roles and responsibilities to non-Veterinary staff, including both classically trained Veterinary technicians/nurses and those with advanced clinical training (whether Veterinary technician specialists or Veterinary professional associates).
  • Practices that offer only a narrow portfolio of services, such as wellness, spay/neuter, dentals, or urgent care – exclusively.
  • Practices that offer a spectrum of options for care, clearly recognizing that one size does not fit all.
  • An increase in creative alternatives for financing pet healthcare.

Notably, to be successful in meeting the growing demand in this underserved market, the new business models will require an adequate workforce – more than we have today. Expanding training capacity for Veterinary professionals is a strategic decision that requires a longer planning horizon than the short-term progressive management of operations needed to navigate recessions. Because the economic fundamentals of the U.S. market for pet Veterinary services are indeed strong, current investment in such endeavors seems prudent.

REFERENCES:

  1. Lloyd, J.W. How might a recession impact Veterinary medicine? The Fountain Report, Antelligence, Dec. 2, 2022, 2 pp.
  2. Covey, S.R. The 8th Free Press, New York, 2004, 411 pp.
  3. Wolf, C.A, J.W. Lloyd, and J.R. Black. An examination of US consumer pet-related and Veterinary service expenditures, 1980-2005, J Am Vet Med Assoc, 233(3):404-413, 2008.
  4. Zhang, X., L. House, and M.J. Salois. An examination of US pet owners’ use of Veterinary services, 2006-2018, Vet Med Sci, 10:e1370, 2024.
  5. American Pet Products Association. 2025 State of the Industry Report. Stamford, CT, 2025. Available at: https://americanpetproducts.org/news/the-american-pet-products-association-appa-releases-2025-state-of-the-industry-report (accessed 05/28/25).
  6. State of Pet Care Study: Pet Parents’ Assessment of American Veterinary Care. PetSmart Charities, Inc. and Gallup, Inc., 2025. Available at: https://www.gallup.com/analytics/659123/gallup-petsmart-charities.aspx (accessed 05/28/25).
  7. Lloyd, J.W. The Veterinary market’s invisible hand. Today’s Veterinary Business, NAVC, Dec 1, 2024. (available at: https://todaysveterinarybusiness.com/invisible-hand-viewpoint-1224/, accessed 12/04/24).