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Slow growth industries


January 8, 2013 –Over the past 12 months, even the slowest growing industries in the U.S. have seen slight improvement, according to recently released data on private companies from Sageworks.

Counterpart to last week’s analysis of the fastest-growing industries of the past 12 months, this preliminary analysis shows which U.S. industries (as categorized by NAICS codes) have grown the most slowly during the last 12 months, which ended on December 18, 2012.
Slow Growing Industries
While making this short list is not a positive for these U.S. industries, the good news is that only one of the slowest-growing industries actually experienced a sales decline during the last 12 months. That industry was land subdivision (NAICS 2372) and includes private companies that subdivide land and then prepare the lots for sale to contractors. Land subdivision saw drastic declines during 2008 and 2009 in response to the housing bubble, and while the change in sales may not yet be positive, the nearly 3 percent decline during the last 12 months is an improvement over those of the recession.
Sageworks analyst Brad Shaefer notes that this is “encouraging” for the rest of the economy. “If you look at 2009, more than half of these industries were seeing sales decline. It also means that these industries may not be back to pre-recession levels yet, even though they are growing now. You can see that a lot of them had pretty steep declines, so it doesn’t necessarily mean that they’re doing great now, but they are improving.”
Among the list of the 10 slow growing industries, at least 3 others in addition to land subdivision are tied to the housing market. Giving the steep declines that housing sectors had during the recession, it’s not surprising to still see them on the list, said Shaefer.
Property appraisers (NAICS 5313) experienced nearly 4 percent growth during the last 12 months, while new home builders (NAICS 2351) experienced a similar growth rate, according to Sageworks’ most current data. Retail stores that sell lawn and garden equipment and supplies (NAICS code 4442) had sales increase roughly 5 percent. The average sales growth for all privately held companies within the Sageworks database was around 9 percent during the same period.
“We don’t know for sure what’s going to happen, but it would appear that for a lot of these construction-related industries, sales have been improving since 2010,” Schaefer said. “They’re not seeing increases in growth rates, necessarily, but they are seeing positive sales growth. As confidence keeps rising, these housing-related industries may continue to see growth, even though it’s probably not going to be huge numbers.”
Also making the list of slowest-growing industries were dry cleaners (NAICS 8123) and funeral homes (NAICS 8122).
About the Data
Sageworks possesses a proprietary database of privately held company financial statements aggregated by industry. Each day, approximately 1,000 of these financial statements are collected by Sageworks from accounting firms, banks, and credit unions through a cooperative data model with Sageworks clients. The data is segmented and can be queried by 1,200 industry codes, 70 financial metrics, company size, and geographic location.
About Sageworks, Inc.
Raleigh, NC-based Sageworks is a financial information company. Sageworks’ data and applications are used by thousands of accounting firms and banks across North America. The company has been named to the Inc. 500 list of the fastest growing privately held companies in the U.S. and to the Deloitte Technology Fast 500. 
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