The 10 Fastest-Growing Industries in America

By Anthony Shields  OCT 17, 2012 2:05 PM

Hot sauce, yoga, and self-tanning lotions? Yes, these are the things consumers want more of, recession or not.

 


MINYANVILLE ORIGINAL  The economy isn’t back to full strength yet, but new industries are rising out of the hole of the Great Recession. From the economic crisis, new markets have proven their ability to grow while others fell by the wayside. IBISWorld recently put together a list of the industries expected to flourish based on their contribution to the economy as a whole, absolute revenue growth, establishment growth over the past 10 years, and performance expected through 2017. The analysis is sound, but the results may surprise you as some of the ventures that we currently consider risky -- such as social networking or solar energy -- may become industry dominators in the near future. If you want to be able to tell your fellow investors, “I told you so,” read on.


10. For-Profit Universities
Right now, traditional colleges are in a bind. More high school students are seeking a college education these days, but state budget cuts have reduced resources at private and public universities, rendering them unable to keep up with the influx. This is where for-profit universities come in. Schools like DeVry Inc. (NYSE:DV) and the Apollo Group (NYSE:APOL) are able to reach a multitude of students through online classes and TV programming, and are experiencing rapid growth due to their low teaching costs. The high unemployment caused by the recession has prompted more students and workers to seek higher education instead of combing the harsh job market. Since 2002, the industry has grown 13.6% annually, and is expected to grow 19.26% overall between 2012 and 2017.


9. Hot Sauce Production
The hot sauce production industry has been on fire during the past 10 years, maintaining an average revenue growth of 9.3% per year and an expected growth of 4.5% in 2012. Demand for hot sauce is being driven by demographics and consumption trends, as well as immigration and international demand from Canada, the UK, and Japan. American palates are becoming more diverse, and supermarkets and grocery stores are adjusting to consumer tastes, dedicating more shelves to ethnic cuisine. Hot sauce production isn’t expected to cool down anytime soon; over the next five years, the industry revenue is expected to grow by 4.1% annually, resulting in a 22.38% growth overall.
 
8. Pilates/Yoga Studios
Although it can be a difficult industry for investors to take advantage of, the Pilates/yoga world has been experiencing a steady growth that is expected to continue. As consumers search for ways to stay healthy and fit, Pilates and yoga studios are providing health-conscious Americans with inspiring conditioning routines focused on building strength and flexibility. Business at Pilates and yoga studios endured admirably through the recession, merely slowing in 2008 an 2009 whereas other industries experienced revenue declines. From 2002 to 2012, the industry grew an average of 12.1% and is expected to expand 5.1% in 2012. From 2012 to 2017, revenue is expected to grow annually by 4.8%, gaining an overall growth of 25.12%. 
 
7. Generic Pharmaceutical Manufacturing
As the median age of US residents continues to rise, so does the number of consumers who require prescription drugs. Generic drugs are sold without patent protection and tend to be cheaper, which is making them more attractive to consumers in the face of rising Medicare costs. In addition, industry operators like Mylan Inc. (NASDAQ:MYL) and Watson Pharmaceuticals Inc. (NYSE:WPI) have cut costs by closing inefficient plants and removing redundant sales positions, thus expanding profit margins. Revenue is expected to grow 8.1% in 2012, with an average annual growth of 6.3% over the next five years, creating a 37.69% growth overall.
 
6. Solar Panel Manufacturing
The dramatic price increase in gas and other energy costs has created increased public demand for alternative energy solutions. The solar panel industry has been able to take advantage of this, as demonstrated by its revenue growth of 32.3% from 2002 to 2012, and its expected revenue growth of 9.4% this year. The federal government seems more dedicated than ever to reducing the US’s dependency on fossil fuels and other non-renewable sources, and has repeatedly offered support to solar panel developers in order for them to compete with low-cost manufacturers abroad. In the next five years, revenue for the industry is expected to grow 8.2%, creating an overall growth of 48.8%.
 
5. Online Glasses & Contact Lens Sales
Online retail products have been growing at a rapid rate, thanks to the increasing speed and security of online monetary transactions. Benefiting from this are online stores that sell eyeglasses and contacts, like 1-800 Contacts and Coastal Contacts Inc.(TSE:COA), which have become more user-friendly due to new virtual try-on systems. These systems allow customers to upload a picture of themselves and see how the frames look on their face, increasing their confidence in their purchases. Since 2002, revenue in the online eyeglasses industry has grown 28.2% annually; this year alone, it will grow 11.9%. Between now and 2017, the industry is expected to grow 8.8% on average, leading to a 52.5% overall growth.
 
4. Self-Tanning Product Manufacturing
In these days of heightened health-consciousness, consumer awareness of the harmful effects of UV ray exposure and its contribution to skin cancer has led to a noted decrease in the usage of tanning beds. The self-tanning product manufacturing industry quickly found favor with consumers who were happy to skip the cancer-causing tanning bed and choose from a wide selection of skin tone products. The industry has grown 22.7% since 2002, and is expected to grow 18.1% this year. Over the next five years, this category is expected to grow 10.7% annually, resulting in an overall increase of 65.87%.
 
3. 3D Printer Manufacturing
Rapid technological advances and falling costs have led to the growing number of affordable 3D printing. Through a process that lays down successive layers of materials, 3D printers allow manufacturers to create anything from statues to jewelry from precise schematics in a single-build process. As the cost of producing these high-tech machines decreases, companies like Z Corporation hope the printers will be used in more applications, such as aerospace-related part manufacturing. The 3D printer manufacturing industry has grown an average of 8.8% since 2002, and it's believed that it will hit 20.3% growth this year alone. Between 2012 and 2017, the industry is speculated to grow 14% annually, resulting in a whooping 92.24% overall growth.
 
2. Social Network Game Development
Recently, Facebook (NASDAQ:FB) announced that it had hit the 1 billion-users mark, demonstrating how deeply social networks are engrained in the lives of consumers. Profiting from this are social network game developers, like Zynga (NASDAQ:ZNGA) and Electronic Arts (NASDAQ:EA), which seek to entertain consumers in between online interactions. The industry’s games may be free to play, but developers still earn revenue through the sale of virtual goods that enhance game-play, and through online ad sales. Not surprisingly then, the recession helped boost revenue for the industry; cash-strapped players decided they'd rather spend money "in-game" instead of paying for a new retail release. Since 2002, the industry has grown 120%, and this year IBISWorld analysts expect it to grow 20%. In the next five years, the industry is speculated to grow 22% annually, resulting in a substantial 170.65% growth overall.
 
1. Green & Sustainable Building Construction
The construction industry was one of the hardest hit by the Great Recession, but the green and sustainable building construction industry capitalized on the green movement, while enduring the downturn. Firms in the industry, such as The Turner Corporation, construct energy-efficient buildings that are largely composed of sustainable materials. Government programs like Leadership in Energy and Environmental Design (LEED) and Energy Star have driven demand, as have local and state building codes that promote the use of energy efficient building design. Since 2002, the industry has grown annually by 28.9%, and it is anticipated to grow 18.3% this year. Between 2012 and 2017, annual revenue for the industry is expected to grow at an average of 22.8%, resulting in a massive 179.34% overall growth.

(See Also: The 10 Fastest Dying Industries in America)
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