As 2017 comes to a close, IBISWorld analysts have keyed in on five industries ripe for strong growth in the new year. While most of these industries have experienced exceptional growth over the past five years, some have been challenged by more volatile revenue fluctuations. Despite these differences, the following five industries are poised for tremendous growth in 2018.
Medical and Recreational Marijuana
The Medical and Recreational Marijuana Stores industry, intertwined with the Medical and Recreational Marijuana Growing industry, are expected to blaze ahead into 2018. Spurred by a wave of legalization, revenue across medical and recreational stores rose an estimated 18.4% to $8.1 billion in 2017, while revenue for growers expanded 21.4% to $4.6 billion.
With all marijuana sales deemed illegal according to federal law, the market for legal marijuana is heavily dependent on state regulation. Sales of medical marijuana make up the bulk of revenue, enabled by the various regulations across the 29 states and the District of Columbia where medical marijuana is legal. However, it is the legalization of recreational marijuana that spurred the industry’s more recent astronomical growth. The industry’s expansion in 2017 was driven by the continued growth of recreational marijuana sales across Colorado, Washington and Oregon.
The watershed legislative changes stemming from the 2016 elections that expanded recreational marijuana products to eight US states will have their greatest effect in 2018, creating new markets for growers and sellers. Most notably, California, the most populous state in the country and already the largest market for cannabis expenditure, will permit the cultivation and sale of marijuana for recreational consumption in 2018. As a result, the Medical and Recreational Marijuana Stores industry is expected to experience a sales jump of 40.2% in 2018 to $11.4 billion, while the Medical and Recreational Marijuana Growing industry will experience high growth of 43.6% from 2017 to 2018, to $6.6 billion.
Demand for wind turbines is expected to surge in 2018, albeit temporarily. Revenue in the Wind Turbine Manufacturing industry is forecast to increase 48.8% over the year, fueled by the impending 2019 expiration of the federal Renewable Electricity Production Tax Credit (PTC). Utilities that begin construction of wind power systems prior to the expiration of the PTC are eligible for a tax incentive for each kilowatt hour of energy produced over the first 10 years of the project’s operation. Although demand for renewable energy is generally on the rise, and wind power continues to become less expensive to produce and distribute, federal incentives have long been the main driver of utility demand for wind turbines. As a result, wind turbine demand has been extremely volatile over the past decade, fluctuating wildly with lapses and extensions of the PTC. Based on previous legislation, the current Congress and White House are unlikely to prioritize renewable energy incentives, so utilities planning to make wind power investments will be frontloading them in 2018 to take advantage of existing tax credits, causing revenue to grow from $7.3 billion in 2017 to an expected $11.0 billion in 2018.
The Wireless Telecommunications Carrier industry is a highly adaptive and technological industry, investing heavily in product and service development as the landscape of the economy has changed. Consumers have consistently shifted away from traditional voice packages and landlines, instead opting for more data-centric plans that enable easy internet access and application streaming. Furthermore, the transition to fourth-generation (4G) wireless data services and the long-term evolution (LTE) standard are both transforming the industry into one that primarily delivers broadband connectivity. This shift has been further augmented by a higher level of wireless penetration, which measures wireless devices per person, reaching 120.6% at the end of 2016, according to the CTIA. As the industry has adapted well to shifts in consumer demand, it is forecast to grow 8.6% in 2018 to $276.3 billion.
The Tank and Armored Vehicle Manufacturing industry’s revenue is anticipated to surge 17.4% to $3.3 billion in 2018. After the Iraq War ended, the wind-down of combat operations in Afghanistan and budget sequestration, a boom in demand for tanks, armored vehicles and, in particular, mine resistant ambush protected (MRAP) vehicles came to an end. Consequently, industry revenue plummeted, including a 6.8% decline in 2017. However, demand is finally expected to stabilize as defense spending recovers. Demand for armored vehicles will especially benefit from the Joint Light Tactical Vehicle (JLTV) program, which will replace the Humvee with a more armored platform. Industry leader Oshkosh Corporation, which holds 9.4% market share, won the JLTV contract in 2015—a contract that may eventually be worth $30.0 billion. Oshkosh’s contract, when combined with other Defense Department programs and strong exports caused by conflict in the Middle East, will boost industry revenue growth for years to come.
As showcased by the aforementioned strong growth rates, 2018 is expected to be a prolific year for several industries across various sectors, from environmental upkeep to armored vehicle manufacturing. To stay up-to-date on these industries and for more information on their poised growth rates over the five years to 2022, refer to the industry reports on the IBISWorld website.