Jul 14, 2018

The Fastest-Growing Industries In America

As reported in the Federal Reserve’s Small Business Credit Survey (SBCS), small businesses around the nation are experiencing impressive growth. Profitability rose from 27% in 2016 to 31% last year, and revenue grew from 21% to 26% in that same period.

Best of all, this optimism seems sustainable. When business owners were asked about the outlook for the next 12 months, more than 70% anticipated their revenue would grow. About half of the respondents said they plan to hire additional staff as well.

Of course, business growth isn’t equal across all industries. Some are skyrocketing, while others are moving along at a more traditional pace. A smaller number are in decline. These shrinking industries often involve goods and services that are becoming less popular in our modern world, such as tobacco manufacturing, newspaper publishing, magazine publishing, paper mills, cable providers, and wired telecommunications carriers.

On the flipside, there are many industries experiencing substantial growth. According to Sageworks, a leading source of industry data, it all starts with services that support mining and oil or gas extraction. These types of businesses have experienced a 44.9% average sales growth and added 87,000 jobs since 2016.

“This category could include everything from prospecting to drilling, but it’s more than 40% year over year growth rate sets it apart from the rest of the list and even our previous years’ lists,” Sageworks analyst Libby Bierman told Forbes.com. “We aren’t really sure what the cause is, but it could be the confluence of demand and limited supply.”

Also near the top of the Sageworks “fastest-growing” list are several industries related to construction, including engineering companies, building finishing contractors, and architectural firms. While this is great news for the construction world, it’s actually not as stellar as last year, when seven of the top 10 industries on the fastest-growing list were related to construction.

The most noticeable slowdown actually took place in the computer systems industry. It topped last year’s “fastest-growing” list, but failed to make the top 10 this year. When you look at the data, however, companies in the industry are still performing well. They just didn’t have enough growth to make it into the upper echelon of the list.

“There is no question that small business is booming,” NFIB Chief Economist Bill Dunkelberg said in a recent news release. “Consumer spending, the new tax law, and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors.”

As recent examples show, there will always be fluidity when it comes to which industries are experiencing the largest sales growth and adding the most jobs. But overall, business is in a great place and shows no signs of slowing down.

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About the author

Grant Olsen
Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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