The Top 10 Growth Industries for 2011
For most sectors, 2010 was a comeback year, as companies finally began adjusting to an economic environment that constantly seemed at risk of double-dipping back into recession. Now that those fears have transformed into mild concerns over slower-than-expected growth, 2011 will present an opportunity for many industries to rejuvenate themselves -- and several are on track to do just that.
Independent researcher IBISWorld ranked 711 U.S.-based industries on their ability to increase revenue, industry gross products, employment, productivity improvements and profitability to make its predictions of the 10 top performing industries for 2011. Here's the list it came up with:
1. Iron Ore Mining: This industry will build on the success that the iron and steel manufacturing sector experienced in 2010. IBISworld reports that the sector expanded by 22% in 2010, which is expected to fuel demand for iron ore next year as infrastructure projects and building pick up. Growing demand will mean higher revenues and profitability for companies in this industry.
As an added benefit, "The industry is expected to undergo the greatest employment growth among all 711 industries, which is a positive sign for the U.S. economy," notes IBISworld senior industry analyst Toon van Beeck, who authored its Industry of the Year report.
2. Investment Banking and Securities Dealing: These segments of the financial services industry are due for a revival as better conditions for trading and dealmaking develop next year. Look for investment banks to boost revenue and profitability through increased IPOs, mergers and acquisitions, and proprietary trading. Increased regulations could be the one stumbling block for the industry.
3. Multifamily Homebuilding: After revenue tumbled from $40 billion in 2006 to just $19 billion in 2010, this industry is projected to finally see growth again in 2011. Rental income will be the key to the industry's revival as an economic recovery is expected to increase demand for properties that have rentable apartments. "The cyclical recovery of the real estate market, including improvements in property values, rental rates and transaction volumes, will support this industry," says van Beeck.
4. Molybdenum and Other Metal Ore Mining: As the global economy begins to improve, demand for molybdenum and other metal ores is increasing. Molybdenum is used in many high-strength steel alloys and in other high-temperature and high-pressure applications. Rising demand for metals used in all types of manufacturing is expected to push up prices in 2011, significantly boosting the industry's revenue and profitability.
5. Environmental Consulting: This is one of the "green" industries that's showing promise. Demand for services such as soil-, water- and air-quality management, sustainability studies and consulting, noise pollution, compliance and auditing is rising as companies worldwide focus on environmental sustainability. Additionally, governmental efforts to slow climate change and reduce carbon emissions will have businesses across all industries seeking help to stay ahead of regulators in 2011.
6. Aluminum Manufacturing: Increased economic activity will lead to increased demand for aluminum, which is used in a multitude of products. IBISWorld says many aluminum manufacturers are expected to increase their smelter capacity next year after significant shutdowns in 2008 and 2009. Although production and output won't reach prerecession levels, added revenue growth for companies like Alcoa, Novelis and Century Aluminum will be welcome.
7. Car and Automobile Manufacturing – The restoration of General Motors to health and the renaissance of Ford have this industry in position to take off in 2011. The four largest U.S. auto retailers just reported their best quarterly revenues in two years, which bodes well for the manufacturing and retailing automotive sectors.
9. Domestic Airlines: Improving consumer and business confidence should lead to growth in the airline industry. Higher levels of tourism encouraged by a weak U.S. dollar, increasing airfares and greater passenger traffic as the economy picks up will all lead to higher revenues for air carriers.
10. Financial Planning and Advice. After a surviving a recession, then dealing with a recovery in which stock markets are more volatile than ever, investors are turning back to financial experts for advice. IBIS expects revenues in this field to grow nicely in 2011.