According to analysts at IBISWorld, increasing imports, new competition and new technologies are spelling disaster for some American industries. According to their recent report, developed for the M&A Advisor Distressed Investing Summit, here are the top five declining sectors in American business today:
1. Apparel & Fashion Accessories Manufacturing
In an industry that includes fashion apparel, leather goods, luggage and footwear, there is one primary and hardly surprising reason for sector decline: the overwhelming competition and import penetration from alternative sources in Asia. Low priced imports, which were just over 70 percent of consumer demand in 2003 are expected to be nearly 97 percent of consumer demand in 2013.
2. Printing & Paper Products
Like competition from imports above, the reason for decline in the printing industry is hardly a surprise. Maps, calendars, cards, art supplies, office supplies and design products have all seen a major decline due to the rapid increase in electronic software and solutions. The art and office supply industry alone has fallen an average of more than three percent per year from 2008 to 2013.
3. Lawn & Garden Products
This sector, which includes plumbing parts, florists and outdoor equipment and lawn stores is also experiencing a decline due to increasing import penetration. Imports of outdoor furniture are expected to increase at an annual rate of almost five percent over the next five years.
4. Family Recreation Centers
With a multitude of options for entertainment and Americans’ notoriously busy schedules, an industry that includes miniature golf, bowling and karaoke has seen a sharp decline. Newer technology in gaming and a number of other factors have played a role in the decline. In response, single activity centers like bowling alleys have given way to multi-purpose entertainment spaces with full food and alcohol service.
5. Consumer Trade & Product Manufacturing
This sector has experienced competition from both import penetration and technological changes. Products like audio-video equipment, computers, furniture and lighting are all on the decline in the U.S. In the video equipment manufacturing industry, imports are expected to take over by 2018, when they could make up nearly 98% of consumer demand.