The 10 Fastest-Dying Industries in America
By Jonah Loeb Oct 17, 2012 2:00 pm
In a world of economic ebb and flow, someone's gotta ebb.
MINYANVILLE ORIGINAL Ah, autumn, that wonderful season when everything gets really beautiful and then dies. Unfortunately, industries aren't like leaves. When they die, there's no burst of color. Unless someone swoops in like Captain Planet (I'm mixing my metaphor pretty vigorously here), it's just a slow, bumpy ride to the finish…and sometimes, the road's not so slow. Let's take a look at the industries that are on their way down (and perhaps out) over the next five years.
No, people aren't wearing less clothing. More's the pity! No, this one's about outsourcing, folks. Industry revenue is down more than 50% since 2002, and it's expected to drop another 3.8% over the next five years. The garment-making industry is trapped in a vicious cycle: more outsourcing means less revenue, which means more outsourcing, and so on. The victims of the Triangle Shirtwaist Factory fire might approve, but otherwise it's bad news for Hanes (NYSE:HBI) and others.
Turns out the financial crisis has been really bad for unincorporated banks. Who knew? These banks, too small to be included in the federal government's relief program, have been forced to consolidate or go commercial in order to get bailout money. This means major industry players like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) are no longer in the industry at all, and those who remain are being forced towards commercial status. This confluence of factors means private banking revenue is projected to drop 4.2% over the next five years.
Your refrigerator breaks. What do you do? Well, back in 1977, you'd call the refrigerator repairman, and Dan Aykroyd would come and inadvertently show you his butt. These days, though, Americans prefer to just head over to Best Buy (NYSE:BBY) and buy a new one rather than have the old one repaired, and as a result, the appliance repair industry is hurting. Also complicating the issue are the increasingly-extensive warranties offered by manufacturers, agreements that essentially nullify the need for a repairman at all. Revenues have fallen around 5% a year for ten years and are expected to fall a further 5.6% by 2017.
I'm part of the problem. As I write this, I'm wearing a pair of French-made Palladium boots because they're comfortable and I'm not responsible with my money. But the trend doesn't stop with me: low-cost imports, especially from Vietnam, have flooded the shoe market. A staggering 95% of the shoes bought in the United States are made overseas, and low-cost labor means the trend is likely to continue: industry revenue is projected to fall 8.6% over the next five years.
When I was a kid, I used to wear a Peter Pan costume pretty much every day, including green tights, a cloth cap, and a little cardboard dagger. Unfortunately, my efforts 18 years ago didn't manage to save the costume industry. The low cost of overseas labor and the growing trendiness of homemade costumes mean that the industry is expected to decline by 9.8% by 2017. Perhaps the only hope for costume-makers is that due to the first debate between President Obama and Mitt Romney, this costume in particular will probably sell like hotcakes this year.
Americans' fears about China are largely overblown, but in the case of the hardware industry, they're entirely justified. Imports from China account for over half of all the little metal doodads sold in the U.S. this year, up over 20% in the last decade. The industry faces an 11.3% decline over the next five years, and the outlook is pretty bleak: clothing and shoe industries can potentially recover by producing quality, high-end products that persuade customers to start buying American again, but unfortunately for the hardware industry, a hinge is pretty much just a hinge.
The advent of various solutions for monetizing online content has breathed life into an industry that recently reached Cary Elwes levels of "mostly dead," but newspapers have a long way to go. Industry revenue has dropped 50% in the last decade and is projected to fall another 19.1% by 2017. Newspapers' fierce battle to prove their worth in a veritable ocean of free online content will be interesting to watch: will high-quality, professional journalism with a significant pedigree make a case for itself? Or will we readers be abandoned in a sea of cat videos and Kardashian updates? For once in my life, I'm rooting for News Corporation (NASDAQ:NWS).
Like everyone else who's ever bought a spindle of blank compact discs, I distinctly remember the moment when I got home from Staples (NASDAQ:SPLS) to realize that I only needed one of them. Digital storage methods like cloud computing are increasingly replacing hard drives and flash drives, and the prevalence of streaming media over physical media (see Netflix (NASDAQ:NFLX) and its near-abandonment of DVD rentals) means that among consumers with spending power, the need for these products is simply vanishing, with industry revenues projected to drop 20.1% over the next five years.
Q: How much does a hipster weigh?
A: An Instagram!
Seriously, though, when was the last time you saw an actual, physical photograph? Mid-range smartphones have cameras powerful enough to satisfy all but the most demanding consumers, and they've all got their own darkrooms or something. Plus, the advent of photo-sharing sites like Instagram (which Facebook (NASDAQ:FB) keeps smacking its chops over) has rendered old photo albums obsolete. The photofinishing industry faces a staggering drop, with revenues expected to fall 40.6% by 2017.
Oof. This one's going to sting. Again, Netflix and Amazon (NASDAQ:AMZN) have led the charge away from physical media and towards streaming, while the mobile gaming world has taken off in a huge way. The world's best-selling gaming system isn't made by Microsoft (NASDAQ:MSFT) or Sony (NYSE:SNE) anymore, but Apple (AAPL). It's the iPhone. So how bad is it? The industry is projected to decline 52.5% over the next five years as streaming video sites and game engines like Steam begin to rule the market in earnest. Ironically, this ultra-modern-seeming industry is dying faster than any other.
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