In its annual publication on the state the nursery sector, Laing & Buisson said the UK market had increased in real terms by one per cent, or around £4.1bn.
But on average occupancy figures for nurseries have remained relatively static, with a vacancy rate of 18.2 per cent in March 2011, compared with a 17.5 per cent the previous year.
Author of the report economist Philip Blackburn said: "The children's nurseries market looks to be in fair shape post-recession, as recent contraction appears to have levelled off.
"However, a number of economic risks have the potential to dampen demand for children’s nursery care going forward, not least very weak economic growth in 2011, and heavy fiscal restraints on public spending.
"Specific to the nursery sector, these factors include static corporate funding of nursery care in 2010; cuts to childcare tax credits and to relief on corporate childcare vouchers in 2011; and increasing use of informal childcare by parents."
When asked in March 2011, nurseries on average reported that the fees that charge had increased by 3.5 per cent in the previous 12 months less than the 4.6 per cent inflation in 2010.
Blackburn added: "At the same time the coalition has committed to many of Labour’s spending pledges for early years, most notably the extension of subsidised places for two-, three- and four-year-olds. In addition, most nursery providers appear generally optimistic about future business conditions, and strong performers, which have been able to attract investment, are in a good position to expand and develop while business values remain below trend."
