The 8 Most Troubled Industries in the U.S.

Senior Entrepreneurship Writer at CNBC
4 min read

Being an entrepreneur is often an uphill battle. Confronting unforeseen obstacles and finding solutions is what you sign up for when you decide to open a business.

That said, you don’t want to be Don Quixote, either. Starting a business in an industry that is dying or facing extreme international competition is like fighting those windmills. And there isn’t much money to be made in windmill fighting.

Related: The Fall of a Franchise: Blockbuster and 5 Other Chains That Went Bust

In that vein, market research firm IBISWorld has ranked the industries that are expected to see the highest percentage of U.S. businesses close in the next five years.

In some cases, the closures are a result of changing consumer behavior and evolving technology. In this era of Netflix and Redbox, for example, people aren’t driving to movie rental storefronts like they used to. Some of the industries on the list are losing ground to foreign competition. For instance, China is manufacturing solar panels at a much lower cost that the U.S., putting stateside manufacturers virtually out of business.

Related: 10 Promising Startups Poised to Change the Way You Live, Work and Play

Here is a snapshot of the eight industries expected to hemorrhage the largest percentage of businesses between now and 2020, according to IBISWorld. Sectors are ranked from the highest percentage of business closures expected to the lowest. 

Related: The Companies That Apply for the Most Patents and Trademarks (Infographic)


1. DVD, game & video rental services

1. DVD, game & video rental services

Closures expected by 2020: 15.1 percent

In a world where you can stay in your slippers and stream a movie immediately, why would you trek to a rental store? The decline in rental stores has been in motion for awhile, with even Blockbuster closing its doors in 2013. For those consumers who don’t have streaming technology just yet, rental kiosks in supermarkets and convenience stores have made the standalone video and DVD rental store into an unnecessary stop on the errand list.

Related: 5 Secrets to Recognizing an Industry Ripe for Disruption

2. Solar panel manufacturing

2. Solar panel manufacturing

Closures expected by 2020: 8.9 percent

If you drive a car, you know that the price at the pump has fallen drastically recently. Lower coal-based fuel prices have cut away at demand for solar energy products. Where there is demand, China is able to make solar panels much more inexpensively than U.S. manufacturers.

Related: Who Will Step Up and Disrupt the Real Estate Industry?

3. Apparel knitting mills

3. Apparel knitting mills

Closures expected by 2020: 7.1 percent

Clothing retailers can purchase textiles made in Asia and South America at a much lower cost than they can here in the U.S. And while some niche clothing manufacturers are trying to get customers to care about the working conditions where their clothes were made, most people still make decisions with their wallets and cheap wins.

4. Recordable media manufacturing

4. Recordable media manufacturing

Closures expected by 2020: 6.2 percent

When’s the last time you copied files to DVD? Exactly. With computing moving to the cloud, people don’t need to record digital material on tapes or disks anymore. And for those who want to share images or video without it touching the Interwebs, there are USB drives and portable hard drives to do that for you.

5. Photofinishing services

5. Photofinishing services

Closures expected by 2020:  5.5 percent

Sad as it may be, the Instagram and Snapchat generation doesn’t print out photos and keep them in photo albums. As a result, businesses that offer photofinishing are shrinking.

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6. Mail order

6. Mail order
Image credit: Breibeest

Closures expected by 2020: 5.3 percent

Video killed the radio star and online shopping is killing the physical shopping catalogue. If you can peruse the newest sale at your favorite shop on your mobile while you wait at the dentist, then why would you wait until you get home to look through a catalogue?

7. Computer peripheral manufacturing

7. Computer peripheral manufacturing
Image credit: Pixabay

Closures expected by 2020: 4.5 percent

Computer add-ons, like special monitors, are more and more popular in the U.S., but businesses that make these digital accessories in the U.S. can’t compete with the labor costs in the Mexico and China.

8. Database and directory publishing

8. Database and directory publishing

Closures expected by 2020: 4.1 percent

There was a time when if you wanted to know about a company and the people who work in that company, you would find that information in a printed directory. In a world where to Google has become a verb, businesses that print industry reports are dinosaurs.


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