Here are three of the expanding subsectors, according to a new report by IBISWorld, a market-research firm:
Chemical manufacturing accounts for about 16% of total manufacturing value-added to the U.S. economy, and it is burgeoning. The main growth engine is output of refined petrochemicals resulting from the American boom in hydraulic oil and gas fracturing. Another main growth engine is organic chemical making, which provides raw materials for manufacturers in China and other low-cost countries. Also, rising production of vitamins, supplements and generic pharmaceuticals has boosted this sector.
Machinery manufacturing. Capital equipment has been another bright spot, including heavy equipment for agriculture, oil and gas production and construction. Exports have been a big boon to this sector, such as the bulldozers and other big pieces sent abroad by Caterpillar. The revival of domestic construction activity after the Great Recession also has boosted activity and employment in machinery manufacturing.
Fabricated metal product manufacturing. Companies forging, stamping, forming and machining metal products have seen growth as the U.S. economy picks up steam and as they have increased exports, whose share of revenue in the subsector has climbed to an expected 11% this year from under 7% in 2005. Valve manufacturing oil and gas exploration and petrochemical production has been the fastest-gaining subsector in this category.
On the flip side, here are three manufacturing sectors IBISWorld says are in the midst of contraction:
Apparel. The U.S. has lost about 90 percent of its clothes-manufacturing jobs over the last 20 years to China and other lower-wage Asian markets, because it is a labor-intensive business. However, there is some “reshoring” going on as wage differentials decrease between the U.S. and abroad and as “fast-fashion” retailers look to shorten their supply lines so they can keep up with quickly changing trends in American fashion.
Printing and related support activities. It’s no secret that the digitization of information has delivered a huge hit to the printing of books, magazines, newspaper and business forms. A further decline is expected as this mega-trend continues, exacerbated by the increasing price of paper and a consistent decline in print advertising.
Furniture and related products. There are a few American furniture manufacturers around, but import penetration and the housing crash undermined this sector over the last few years. Since 2005, imports’ share of domestic demand for furniture has risen from less than one-quarter to about one-third, while employment fell by about 40%. A recovering housing market should staunch some of the sector’s erosion over the next few years.