Declining Industry

DEFINITION of 'Declining Industry'

An industry where growth is either negative or is not growing at the broader rate of economic growth. There are many reasons for a declining industry: consumer demand may be steadily evaporating, the depletion of a natural resource may be occurring, or there may be the emergent substitutes because of technological innovation.

Declining Industry

BREAKING DOWN 'Declining Industry'

An example of a declining industry is the railroad industry, which has experienced decreased demand - largely due to newer and faster means of transporting goods (primarily air transport and trucking) - and has failed to remain competitive in pricing, at least in relation to the benefits of faster and more efficient transport provided by airlines and trucking services.

RELATED TERMS
  1. Transportation Sector

    A category of stocks relating to the transportation of goods ...
  2. Growth Industry

    A sector of the economy experiencing a higher-than-average growth ...
  3. Emerging Industry

    A group of companies in a line of business formed around a new ...
  4. Transportation Bond

    Fixed-income obligations of issuers that own and operate transportation ...
  5. Substitute

    A product or service that a consumer sees as comparable. If prices ...
  6. Depletion

    An accrual accounting method that companies use to allocate the ...
Related Articles
  1. Economics

    Is This The Next Big Play For Growth Investors?

    Read about how the railroads sector might perform for growth investors, and why the cyclical nature of railroads makes room for future opportunity.
  2. Mutual Funds & ETFs

    Top 4 Transportation Mutual Funds

    Discover the top-rated mutual funds in the transportation industry, and understand how investors can position these funds in their asset allocation.
  3. Economics

    Explaining Industry

    The term industry refers to a classification of companies that share similar business activities.
  4. Forex

    Global Transportation: Exploring Revenue Trends and Fundamentals

    Explore the geographic trends in global transportation sector revenues, and discover the factors that influence revenue contribution and growth in this area.
  5. Professionals

    Considerations of Global Industry Competition

    CFA Level 1 - Considerations of Global Industry Competition. Learn the elements within global industry analysis. See how Porter's five forces can help determine an industry's competition ...
  6. Professionals

    Depletion

    Depletion
  7. Economics

    Understanding the Substitution Effect

    The substitution effect is an economic term used to describe consumer behavior relative to price or income changes.
  8. Term

    What's a Substitute?

    A substitute is a good that satisfies the same needs as another.
  9. Personal Finance

    Industries That Will Never Go Away

    A list of industries that will not perish anytime soon, as they provide and feed our basic needs.
  10. Markets

    The Economics of Running a Food Truck

    Thinking of getting into the food truck business? It's not as easy as it looks. Here are some of the various challenges you'll face.
RELATED FAQS
  1. Why should I invest in the railroads sector?

    Reap the benefits of the railroad sector's advantages over its competitors by adding companies in this industry to your investment ... Read Answer >>
  2. How does the risk of investing in the industrial sector compare to the broader market?

    Discover how the risk of investing in the industrial sector compares to the broader market. The industrial sector is highly ... Read Answer >>
  3. What are the most popular mutual funds that give exposure to the railroads sector?

    Investing in sector-specific mutual funds, such as transportation funds that include railroad company stock, can be a smart ... Read Answer >>
  4. What are the most popular mutual funds that invest in the automotive sector?

    Discover some of the mutual funds that investors consider utilizing to profit from gains in the automotive industry portion ... Read Answer >>
  5. Should a small business test the substitution effect on its products before launch?

    Explore the substitution effect and find out how small businesses may evaluate how this principle impacts their own products. ... Read Answer >>
  6. What developed countries have the largest proportion of industrial companies?

    Examine the industrial sector in developed countries, and learn about the shift in manufacturing production to emerging market ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center