Mar 22 2018
The unemployment rate in the United States currently sits at a 17-year low, with only 4.1% of the nation’s labor force jobless in 2018. While some sectors are rapidly hiring and expanding their workforces, others are plagued by competition and engaging in layoffs. Below, IBISWorld not only examines which US industries are contributing to the nation’s strong employment growth, but also analyzes those that are struggling.
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Many of the industries that have helped support US job creation in recent years are experiencing high levels of consumer demand. For example, industries producing alternative forms of energy, such as solar and wind power, have experienced robust revenue growth in recent years as the national dialogue about climate change has taken center stage. As more US consumers and corporations invest in clean energy, operators in the Solar Power and Wind Power industries have rapidly expanded their workforces to meet demand. As a result, the numbers of employees working in these industries have increased at respective annualized rates of 20.6% and 14.8% over the five years to 2018.
Similarly, as the number of US adults over the age of 65 increased at an annualized rate of 4.9% during the five-year period, demand for elderly services expanded. This trend boosted employment for many industries that serve the nation’s older consumers, including the Elderly and Disabled Services and the Adult Day Care industries. Most notably, the Residential Senior Care Franchises industry and the In-Home Senior Care Franchises industry increased their workforces at annualized rates of 11.4% and 8.8%, respectively, over the five years to 2018.
The tech boom of the past decade has also created a growth opportunity for US employment. As consumers have become more comfortable using the internet for a variety of activities, technology operators have required more software engineers and developers to meet demand. This expansion rapidly increased employment for nearly all industries in the technology sector, most notably the Telehealth Services industry, which expanded its workforce at an annualized rate of 44.4% during the five-year period to 2018; the Online Apartment Rental Services industry, expanding an annualized 21.6%; and the E-Commerce and Online Auctions industry, rising an annualized 10.7%.
Despite growing consumer demand for online-based retail industries, which has pressured revenue and employment for many traditional brick-and-mortar operators, some physical retailers have sought to combat this external competition by upping their workforce. Although e-tailers offer convenience, they lack the value-added experience of customer service; therefore, some brick-and-mortar retailers have sought to leverage this advantage by showcasing their highly skilled employees and adding more workers. For example, the Bed and Mattress Stores industry has increased its workforce at an annualized rate of 3.5% over the five-year period as operators hired knowledgeable employees to help customers test bedding. Similarly, the number of workers employed by the Athletic Shoe Stores industry increased at an annualized rate of 4.6% as retailers worked to provide a more personal touch to their stores by using employees to educate customers on the best footwear styles.
Although some brick-and-mortar retail industries have countered online competition by upping employment, most have responded to e-commerce pressure by slicing workforces. This strategy enables physical retailers to boost margins and provides more flexibility to operators seeking to increase their e-commerce activity. As a result, employment has markedly declined for many brick-and-mortar retail industries, such as the Office Supply Stores industry, which decreased its workforce at an annualized rate of 3.9% over the five years to 2018; the Camera Stores industry, declining an annualized 5.1%; and the Department Stores industry, dropping at an annualized rate of 1.7%.
Similarly, several traditional service industries lowered their employment figures as a result of technological advancement. For example, the Data Recovery Services industry, which has been made increasingly obsolete due to pressure from online data storage systems, such as the Cloud, lowered its workforce an annualized 5.7% during the period. Many wholesaling industries have also reduced employment as the result of technology, since more retailers have gained direct access to manufacturers through online ordering, enabling them to bypass wholesalers. This trend can be most notably exemplified in the employment levels of the School Supplies Wholesaling industry, which declined at an annualized rate of 6.2% over the five years to 2018, and the Paper Wholesaling industry, which fell at an annualized rate of 2.9% during the same period.
Edited by Victoria Wolak. Designed by Stephanie Conte.