We recently did an analysis of the 12 Fastest Declining Industries by 2032. In this article, we will discuss a preview of the overall industry outlook and the fastest declining industry by 2032.
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.
Aerial view of a production line of the company’s award-winning packaging products.
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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The Fastest Declining Industry by 2032
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”
To learn about the other fastest declining industries by 2032, check out our free report on the 12 Fastest Declining Industries by 2032.
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Disclosure: None. This article is originally published on Insider Monkey.