In this article, we will take a look at the 12 fastest declining industries by 2032. We will also discuss the industrial outlook and some major players in those industries.
The Employment Outlook Through a Historical Lens
According to our list, most industries are expected to experience a decline in employment fall in the manufacturing sector. According to data from the Bureau of Labor Statistics, employment in the manufacturing sector is expected to decline by 113.4%, from 12.83 million in 2022 to 12.71 million by 2032. On November 14, 2023, BLS reported that the sector lost 1.5 million production jobs between 2007 and 2010 due to a shift of workforce trends from primary industries in manufacturing to services-based tertiary industries such as business and finance, management, and engineering. You can also read our piece on the industries with the highest number of quits in the US.
The Current Landscape of the Manufacturing Sector
On December 1, 2023, S&P Global published a detailed report on the manufacturing business conditions which states that manufacturing business conditions experienced headwinds for the fifteenth successive month in November 2023. The headline Purchasing Managers’ Index (PMI) stood at 49.3 in November 2023, up from 48.8 in October 2023, but remained under the moderation level of 50.0. Global manufacturing output, on the other hand, rose in four of 16 months, as of November 2023. The decline in manufacturing output preceding the pandemic is due to high interest rates and prices. Other key factors contributing to the decline are order backlogs and post-pandemic shortages. Backlogs now account for work for 17 consecutive months. The overall decline in manufacturing output led to a decline in employment for three consecutive months, up to November 2023.
On March 1, Reuters reported that while the manufacturing sector in the US declined in February due to slumped employment and rising layoffs, there are signs of a rebound. In February, the PMI fell month-over-month to 47.8 from 49.1. The PMI remained under 50 for 16 consecutive months, the longest slump since August 2000 and January 2022. Economists polled by Reuters expected the index to hit 49.5, which would ignite a ray of hope for the manufacturing industry in the United States. Machinery, wood products, and computer and electronics products were among the few industries that experienced a sump in February. You can also take a look at the industries which produce the most billionaires.
By 2030, 30% of Hours in the US Could be Automated
On July 26, 2023, McKinsey Global Institute reported that by 2030, 30% of hours worked in the United States could be automated due to the incidence of artificial intelligence. From 2019 to 2022, the US witnessed 8.6 million job shifts, almost 50% higher than the three years before 2019. The report expects 12 million job transitions through 2030, 25% higher than the projections made two years ago. According to the report, workers in lower-wage jobs are 14 times more likely to have to switch occupations. In contrast, workers in high-wage occupations will be required to upskill to maintain their jobs. The report suggests that employment will likely shift away from oil, gas, and automotive manufacturing to more green industries. The construction industry, for example, is already short of almost 400,000 workers. STEM (science, technology, engineering, and mathematics) professionals, health professionals, business and legal professionals, and health and wellness professionals may experience the integration of automation and generative AI at an accelerated speed, which does not necessarily indicate a loss of jobs.
The auto parts manufacturing industry is expected to be one of the fastest declining industries by 2032. One of the major reasons explaining the decline in employment is the incidence of automation and technology. An example of this is ABB Ltd (OTC:ABLZF), a leading automation company based in Zurich, Switzerland. The company makes automotive robots that facilitate auto manufacturers across the globe. The company has signed agreements with automakers like Volvo Car AB (publ.) (OTC:VLVOF) and Porsche Automobil Holding SE (OTC:POAHY) and has placed over 500,000 robots worldwide. On December 19, 2023, ABB Ltd (OTC:ABLZF) announced that it will supply 1,300 robots and functional vehicles to Volvo Car AB (publ.) (OTC:VLVOF) to facilitate the development of its next generation of electric vehicles.
Now that we have discussed the macroeconomic factors determining the decline in employment in the manufacturing sector, let’s take a look at the fastest declining industries by 2032. You can also take a look at fastest growing industries in the next five years.
Our Methodology
To come up with the 12 fastest declining industries by 2032 we sourced our data from the Bureau of Labor Statistics. We sourced the growth in wage and salary employment data from 2022 to 2032, including the compound annual rate of change, represented as the compound annual growth rate (CAGR) in our list. We have ranked the 12 industries that are expected to experience the fastest decline in employment and jobs by 2032 in ascending order of the aforementioned metric.
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12 Fastest Declining Industries by 2032
12. Printing and Related Support Activities
Compound Annual Growth rate (2022 – 2032): -1.8%
The printing and related support activities industry is responsible for the production of printing products including newspapers, books, labels, business cards, stationery, and business forms. Employment and output in the industry are expected to decline at a compounded rate of 1.8% and 0.1% respectively, between 2022 and 2032.
11. Motor Vehicle Parts Manufacturing
Compound Annual Growth rate (2022 – 2032): -1.9%
The motor vehicle parts manufacturing industry ranks 11th on our list of the fastest declining industries by 2032. The industry is responsible for the production of crucial automobile parts including engines, engine parts, body parts, braking systems, electronics, steering components, and suspension parts. Employment in the motor vehicle parts manufacturing industry is expected to decline at a compounded rate of 1.9 % between 2022 and 2032. Output in the industry is expected to grow at a compound annual growth rate of 0.7% for the same forecasted years. The decline in employment in the motor vehicle parts manufacturing industry can be explained due to rapid automation. ABB Ltd (OTC:ABLZF) is an automation company responsible for the production of robotics for the automotive sector. These robots deal with press automation, painting, and final assembly of vehicles. Here are some comments from the company’s Q1 2024 earnings release:
“It was impressive to see new record-high order intake in both Electrification and Motion business areas. Process Automation orders declined from the all-time-high comparable, but remained fairly consistent with strong recent quarterly levels. At the start of this year, we called the fourth quarter the trough for Robotics & Discrete Automation order level. This realized, and as expected order intake increased sequentially. However, it declined sharply year-on-year on the back of customers normalizing order patterns after a pre-buy period.”
10. Furniture Related Product Manufacturing
Compound Annual Growth rate (2022 – 2032): -2.1%
Employment in the furniture related product manufacturing industry is expected to decline at a compound annual growth rate of -2.1%. According to BLS, employment in the industry is expected to go from 36,000 in 2022 to 29,000 by 2032, representing an overall decline of 7%. The industry’s output, on the other hand, is expected to grow at a compound annual growth rate of 0.2% for the forecasted years.
9. Federal Government Enterprises
Compound Annual Growth rate (2022 – 2032): -2.1%
The federal government enterprises industry ranks ninth on our list of the fastest declining industries by 2032, with a compound annual growth rate of -2.1%. According to BLS, employment in the industry is expected to go from 87,100 in 2022 to 70,100 by 2032, representing a decline of 17%.
8. Transportation Equipment Manufacturing
Compound Annual Growth rate (2022 – 2032): -2.2%
The transportation equipment manufacturing industry is responsible for producing equipment to transport people and goods. While employment in the industry is expected to decline at a compounded rate of 2.2%, the output of the industry is expected to grow at a compound annual growth rate of 1.7% for the same forecast years.
7. Consumer Goods Rental and General Rental Centers
Compound Annual Growth rate (2022 – 2032): -2.3%
Employment in the consumer goods rental and general rental centers industry is expected to decline at a compounded rate of 2.3% between 2022 and 2032, contributing to its ranking on our list. The industry’s output, on the other hand, is expected to grow at a compound annual growth rate (CAGR) of 2.9% between 2022 and 2032.
6. Hardware Manufacturing
Compound Annual Growth rate (2022 – 2032): -2.3%
The hardware manufacturing industry is expected to decline at a compounded rate of 2.3% between the forecasted years of 2022 and 2032. The industry is responsible for producing a range of metal hardware finished goods including metal hinges, metal handles, keys, and locks. The industry is also expected to experience a decline in output at a CAGR of -0.1% from 2022 and 2032. Companies like Honeywell International Inc. (NASDAQ:HON) are responsible for fueling automation in the hardware manufacturing industry. Honeywell International Inc. (NASDAQ:HON) is a multinational conglomerate based in North Carolina. The company operates across four segments including aerospace, building automation, performance materials and technologies, and safety and productivity solutions. On May 16, Honeywell International Inc. (NASDAQ:HON) announced its partnership with Enel North America to improve building automation for commercial and industrial organizations that will stabilize the power grid. The company will allow organizations to integrate demand response programs in their operations to maximize productivity. These programs will prevent blackouts and grid outages. Here are some comments from Honeywell International Inc.’s (NASDAQ:HON) Q1 2024 earnings call:
“In the fourth quarter when we announced our intention to acquire Carrier’s Global Access Solutions business for nearly $5 billion enabling Honeywell to become a leader in security solution for the digital age. The transaction further enhances our equipment-agnostic high-margin product business mix within Building Automation. Last year’s acquisition of Compressor Controls Corporation or CCC a leading provider of turbomachinery control and optimization solutions that will play a critical role in early transition aligns with this playbook as well. CCC technologies including controlled hardware, software and services, bolster Honeywell’s high-growth sustainability and digitalization portfolio with new carbon capture control solution. CCC has seamlessly integrated into our Process Solutions business and we are already seeing meaningful revenue synergies benefit with Honeywell Forge.”
5. Lease of Nonfinancial Intangible Assets
Compound Annual Growth rate (2022 – 2032): -2.4%
The leasing industry for nonfinancial intangible assets ranks fifth on our list of the fastest declining industries by 2032. Companies in the industry are responsible for leasing intangible assets such as patents, trademarks, brand names, and franchise agreements. According to BLS, employment in the industry is expected to decline from 22,400 in 2022 to 17,600 by 2032, representing a compound annual growth rate of -2.4%.
4. Apparel, Leather, and Allied Product Manufacturing
Compound Annual Growth rate (2022 – 2032): -2.6%
The apparel, leather, and allied product manufacturing is one of the fastest declining industries with a compound annual growth rate of -2.6% between 2022 and 2032. According to BLS, wage and salary employment is expected to go from 120,300 in 2022 to 92,700 by 2032, representing a decline of 27.7%. The industry is responsible for transforming hides into leather via tanning and fabricating the leather into finished goods. Companies in the industry also produce products from leather substitutes such as rubber, plastic, and/or other textiles.
3. Pulp, Paper, and Paperboard Mills
Compound Annual Growth rate (2022 – 2032): -2.6%
The pulp, paper, and paperboard mills industry ranks third on our list of the fastest declining industries by 2032. The industry is responsible for the production of pulp and paper. The industry’s employment and output are expected to decline at a compounded rate of 2.6% and 1.5% respectively between 2022 and 2032.
2. Manufacturing and Reproducing Magnetic and Optical Media
Compound Annual Growth rate (2022 – 2032): -4.6%
The magnetic and optical media industry is responsible for the mass production of audio and video tapes, optical disks, hard disk drives, and magnetic tape storage. The industry is expected to decline by 4.6% between the forecasted years of 2022 and 2032. FUJIFILM Holdings Corporation (OTC:FUJIY), was first established as a photographic films business, but the spread of digital technology resulted in declining demand for photographic films. FUJIFILM Holdings Corporation (OTC:FUJIY) was quick to pivot its business operations to in-demand industries such as the semiconductor industry, the medical systems and imaging business, and the electronics materials business. On February 8, Teiichi Goto, President and CEO, Representative Director, stated:
“In the third quarter of fiscal year 2023, we again achieved remarkable milestones with our highest ever sales, operating income and net income, primarily driven by the exceptional performance of the Medical Systems and Imaging businesses. Our proactive measures in the Electronic Materials business, such as the strategic acquisition of Entegris, Inc.’s semiconductor process chemicals business, the startup of the semiconductor materials site in Kumamoto, and further capital investment, demonstrate our anticipation of market recovery in the coming fiscal year from April 2024 and beyond. We are confident that we can maintain this positive momentum, achieve record sales and profits in the fiscal year 2023, and carry this positive energy into the next fiscal year, the first year of our new medium term management plan.”
1. Coal Mining
Compound Annual Growth rate (2022 – 2032): -5.5%
Coal Mining is the fastest declining industry with a compound annual growth rate of -5.5% from 2022 to 2032. The coal mining industry is responsible for extracting coal from the ground or a mine. According to BLS, wage and salary employment is expected to go from 40,400 in 2022 to 22,900 by 2032, representing a decline of 17.5%. The industry’s output is also expected to decline at a compounded rate of 4.1%. Sasol Limited (NYSE:SSL) is a leading integrated energy and chemical company based in South Africa, with a market capitalization of $4.55 billion, as of May 29. The company is a prominent name in the coal mining business. Rising coal prices and a decline in coal quality have had a negative impact on the company’s mining business. The company’s mining business witnessed a 39% decline in adjusted EBITDA, for the six months ended December 31, 2023. Here are some comments from the company’s interim financial results for the six months ended December 31, 2023 earnings release:
“Our Mining business saw a 39 percent decline in adjusted EBITDA. This was largely due to lower export coal prices, higher external coal purchases and higher cash fixed costs coupled with safety incidents and related operational challenges experienced in the second quarter of our 2024 financial year. Despite these challenges, we achieved a 6% increase in productivity since the prior period.”
Sasol Limited (NYSE:SSL) is taking significant steps to improve the overall quality of coal. Its integrated coal quality center was implemented last year, facilitating the management of coal quality variations. Here are some comments from its earnings release describing its coal destoning project:
“Additionally, our coal destoning project, which is nearing a final investment decision later in 2024, can improve coal quality and has the potential to reduce the percentage of rocks, in the coal feed to Secunda Operations, which will enable improved gasifier yield and thus, better value chain performance.”
Sasol Limited (NYSE:SSL) is also pivoting to reduce the use of coal in boilers to reduce emissions. Here are some comments from its latest earnings release for the six months ended December 31, 2023:
“Some examples include Bridge to Work, a skills development and employability programme, which will see over 110 beneficiaries graduating from various technical programmes in the next 6 months. Through this programme we are partnering on projects that could potentially provide biomass feedstock, required as part of the pilot to replace coal in the boilers in Sasolburg, aligned to our emission reduction roadmap. This includes a pilot for farmers from the Iphepe programme being coached and mentored on growing Solaris, and employing 200 beneficiaries to harvest and process invasive and alien plants , as biomass feedstock”
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