If you're being affected by the downturn in housing or financial services, hang in there. At some point, those industries will rebound. Others should be so lucky.
Just look at apparel manufacturers in the United States. According to the Labor Department, their ranks are expected to decrease by 54 percent while their output falls more than 43 percent between 2006 and 2016. Then there's the ailing printing business. Jobs in that U.S. industry will drop by 22 percent during the next decade, with output falling by 12 percent.
They're classic examples of twin death knells for industries: foreign competition and technology. Why make clothes in the U.S. when the labor is cheaper in China? Who wants to publish the old-fashioned way when it's cheaper to use the Internet?
So which U.S. industries are dying fastest? It's a crucial question for a host of folks, from investors to workers to government officials looking to avoid economic disaster. For answers, we turned to research firm IBISWorld for projections and analysis of declining industries from 2007 to 2012. We looked at projected changes in industry employment, revenue and gross output. As much as possible, we avoided manufacturing since it's widely known to be in decline.
The most surprising find: While technology is changing the face of many industries, the firms within them are often doing quite well. One strategy for surviving a technological onslaught is to control the change itself. AT&T and Verizon, the largest wired telecommunications firms, are hardly worried that more than 1 million phone "land lines" are expected to be switched off each year between now and 2012. Both of those firms saw their wireless subscriber numbers surge in 2007.
Online video rental firm Netflix, which mails DVDs to subscribers' doorsteps, was quick to foresee the death of the mom-and-pop video store. Last year the company's revenue and net income were up 21 percent and 36 percent, respectively, above 2006 levels. Industry giant Blockbuster was slower to adapt, but it too now offers Web-subscription for movie rentals. Both firms realize that downloadable video is the industry's future. Netflix already offers that service for some movies. Blockbuster's plan is still in the works.
Another way to avoid disaster? Diversify. In response to decades of declining circulation and shaky print advertising numbers, newspaper publishers are expanding their holdings in non-traditional ways. The two largest, Gannett and Tribune, own a stake Careerbuilder.com, the online job search Web site. In 2005, The New York Times Co. bought About.com, a general information site. Will it work? The jury is out. Worth noting, though--the industry's most successful transition is also its most radical. The Washington Post Co. secured their future by buying Kaplan Learning centers, morphing the company into an "information" firm and leaning on the new entity, rather than their news operations, to drive growth.
Bowling alleys and arcades have been on a slide for years, but some of the biggest operators believe they have found a recipe for success, in an otherwise struggling industry, by creating broader entertainment complexes. With more appeal to families, and with more revenue from food and beverage services as well, these complexes have thrived while the industry's many small operators have struggled.
IBIS actually identifies these centers as the areas where operators should move to survive.
To be sure, even growing industries aren't likely to be buoyed this year, given the economic slump in the U.S. that's spreading to other parts of the world.
"Against this backdrop, most industries will not perform as well in 2008, with many seeing deteriorating profits amid decelerating revenue growth and high costs," wrote Moody's Economy.com analyst Michael Helmar in a recent industry forecast survey.
But some aren't likely to see growth at all, even when the economy does turn around. Despite federal subsidies for corn ethanol production, the Labor Department says many sectors of the agriculture industry will feel pinched due to rising costs, productivity increases and growing urbanization. Among the hardest hit: tobacco farmers. The government dropped its price supports for tobacco in 2005, exposing a once-protected domestic industry to cheaper foreign competition. Since 2000, tobacco farm revenue dropped by more than 50 percent, according to IBISWorld. It's expected to fall another 17 percent by 2012.
With projections like that, housing might not feel like such a doomed industry after all.