Although some economic indicators may be slowly improving, some industries are still struggling to recover, according to a survey by industry research firm IBISWorld.
The survey finds that the top dying industries, which are defined by a declining life cycle stage, a decline in revenue and industry participants between 2002 and 2012 and continued declines in these metrics through 2017, are women and girls' apparel manufacturing; costume and team uniform manufacturing; shoe and footwear manufacturing; hardware manufacturing; recordable media manufacturing; newspaper publishing; money market and other banking; DVD, game and video rental; appliance repair; and photofinishing.
As several manufacturing sectors are included on this list of dying industries, the report finds this is largely due to offshoring and outsourcing, which have hit these sectors hard. Employers within the manufacturing sectors have had to move production facilities overseas to China, Vietnam, Indonesia, Mexico and Central America.
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"One of the primary reasons companies have made these moves is to limit labor costs," the report states. "For the U.S. apparel manufacturing sector, wages average 22.6 percent of revenue for industry operators. To reduce these costs, industry operators relocate their manufacturing facilities abroad to areas with far lower average wages."
For the money market and other banking industries, banks owned by nonfinancial companies and private banks were hit especially hard during the financial crisis, the report finds. These banks were too small to be included in the Troubled Asset Relief Program and had to find help under the guidance of commercial banking structures in order to receive bailout funds. This resulted in loss of major players, such as Goldman Sachs and Morgan Stanley.
"Incentives in the form of easier access to funding, the ability to offer a greater range of products and government regulation under the Federal Reserve have pushed industry banks toward commercial banking status, leading to an average annual revenue decline of 6.9 percent over the past five years, to $834 million in 2012," the report states. "Consolidation trends in the larger banking sector will continue to squeeze the industry; IBISWorld projects industry revenue to decline at an average rate of 0.9 percent per year over the next five years."
Despite these industries' struggles, the report suggests that the future is not necessarily negative. As long as these industries are willing to adopt new business strategies, they can become stronger.
"Not all is doom and gloom for these 10 dying industries," the report states. "While these industries are losing ground in their current form, select industry players will be able to transform their businesses to pursue new opportunities. Operators that protect their competitive strengths in profitable market segments, target new niche opportunities and adapt to technological change will return to success over the next five years."
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