Economy: As Obama Meets to Discuss Growth, 10 Sectors Are Sick or Dying

VIDEO: Bianna Golodryga reports on the six straight weeks of
WATCH What's Behind Wall Street's Slow Slide?

President Obama arrived in North Carolina today, meeting with his Jobs and Competitiveness Council to discuss ways to promote U.S. job growth, bolster America's global competitiveness and strengthen the economy.

More on the president's visit will be posted throughout the day on Jake Tapper's blog.

Some sectors of the economy, according to market research company IBISWorld, could use strengthening: An IBISWorld report identifies 10 U.S. industries, which, if not actually dead, are headed that way fast.

Some, such as manufactured housing, theoretically could get better and enjoy a healthy future. Others, such as record stores, cannot: They might just as well strap on a "Do Not Resuscitate" sign and pull down the shades.

"While the U.S. economy is headed further into recovery, not every industry is performing well," writes the report's author, Toon Van Beeck. Every industry, he says, goes through its own lifecycle -- growth, maturity and decline. IBIS combed its database of some 700 industries and studied 200 that were in decline. From those, it identified 10 that it considers "standouts."

All the following, says Van Beeck, are "on the verge of extinction:"

Record retailers
Dealers in manufactured housing
Wired telecommunications carriers
Textile mills
Newspaper publishers
Apparel manufacturers
DVD, game & video rental stores
Providers of video postproduction services
The photofinishing industry
Renters of formal wear and costumes.

Companies in the 10 industries identified by IBISWorld suffer from illnesses intractable and lasting.

All 10 industries are in long-term decline. From 2000 to 2010, each experienced a sizeable contraction both of revenue and of its total number of establishments. Looking forward, further deterioration in both is forecast for each industry between now and 2016. Further, all 10 are being hammered by one or more of the following blows:

Damaging external competition: U.S. hosiery and sock mills, for example, have suffered withering competition from overseas mills that can produce the same quality of goods at lower cost. Mill revenue, in general, fell more than 50 percent between 2000 and 2010, with a further drop of 10 percent forecast over the next five years. External competition also is the reason the formal wear rental industry is on life-support: Imports have grown. But another factor also is at work: As personal disposable incomes have risen in the past decade, consumers have found it more convenient to buy than rent.

Dying Industries

Advancements in technology: As recently as 2000, Blockbuster was a thriving company. While demand for DVDs, games and videos remains strong, Blockbuster has gone bankrupt. It and other brick-and-mortar retailers have seen their business go to competitors using other means to deliver the same product. The same holds true for record stores, decimated by the Internet. Record stores saw a revenue decline of more than 76 percent between 2000 and 2010. Their revenue should drop another 77.4 percent by 2016. In recent years both Virgin Entertainment Group and MTS Incorporated (Tower Records) have left the business.

Industry Stagnation: Manufactured home dealers are the sickest patients here -- guilty, says Van Beeck, of failing to improve their product. Though many have made cosmetic changes to their products, few have spent money on research and development to keep their offerings genuinely fresh and new. The industry saw income fall almost 74 percent in the past decade; the next five years should see a further 62 percent decline. The number of establishments fell by almost 57 percent in the past decade; the next five years should see them drop another 58.7 percent.

At a time when millions of Americans are looking to reduce living costs, shouldn't sales of manufactured homes be up?

Ordinarily, yes, says Van Beeck. But the bursting of the real estate bubble left behind a housing market so depressed that bargain-seekers don't need to buy a manufactured home.

"There are a huge number of unsold homes of the conventional kind available at rock-bottom prices," Van Beeck says. "Demand for manufactured homes simply isn't there."

So, which industry is nearest death?

"I would give record stores top rank," says Van Beeck. "While there will be a core following of vinyl enthusiasts and physical disc owners, stores will be unable to generate enough of a turnover to stay alive."

Manufactured housing, by comparison, might enjoy a modest rebound in years ahead, as prices of conventional homes begin to rise, says Nikoleta Panteva, an IBISWorld analyst. Her most recent forecast for manufactured housing calls for sales to improve by 2 percent next year -- too little to constitute a significant turnaround, she says, but enough to keep the industry on life support.

Dying Industries

The IBISWorld study notes that just because an industry is dying doesn't mean that there cannot be found within it exceptional companies that are managing to thrive.

"I found it interesting," says Van Beeck, "that even within the 'mills' category, for instance, there were businesses that didn't suffer from the category's typical disadvantages. They have a special niche, or they rely on a new technology that isn't yet widely available overseas."

As an example, he cites mills producing higher-tech non-woven fabrics, including flame-resistant and moisture-absorbent ones.

"In those, the U.S. has technology advantages," he says.

Warren Buffett's Berkshire Hathaway, Van Beeck says, has made a science out of identifying profitable, still-lively companies in ailing industries. Clayton Homes, a maker of manufactured homes, is a Berkshire subsidiary. Ditto apparel maker Russell Corporation.

What would Van Beeck say to a youngster who came to him and said, "Gee, Mr. B, I've got a great idea for a new business: Renting formal wear to people who live in manufactured housing!"

Van Beeck replies, "I guess I'd ask the young person, 'How interested are you in hard work?' You have to be able to look hard to see where the opportunities are. Opportunities still exist in all these industries, but getting the remaining dollars out is getting more difficult and more competitive -- more so than in a growth industry. If you've got a unique idea, though -- who knows?"