Declining Industry

AAA

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

INVESTOPEDIA EXPLAINS '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. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Sunrise Industry

    A colloquial term for a sector or business that is in its infancy, ...
  3. Industry Bet

    A strategy whereby investors or portfolio managers increase or ...
  4. Emerging Industry

    A group of companies in a line of business formed around a new ...
  5. Industry

    A classification that refers to a group of companies that are ...
  6. Growth Industry

    A sector of the economy experiencing a higher-than-average growth ...
RELATED FAQS
  1. What key U.S. economic indicators do economists track to determine if the conditions ...

    To determine if conditions for stagflation are present in the U.S. economy, analysts primarily consider the following indicators: ... Read Full Answer >>
  2. What are the main factors that drive share prices in the automotive sector?

    The main factor that drives share prices in the automotive sector is the expected future cash flows of the companies that ... Read Full Answer >>
  3. How does the law of supply and demand affect the oil industry?

    The law of supply and demand primarily affects the oil industry by determining the price of oil. The price, and expectations ... Read Full Answer >>
  4. What are the primary factors that led to the difficult period of stagflation during ...

    Stagflation is a type of economic malaise in which a stagnant economy coincides with high inflation for a period of time. ... Read Full Answer >>
  5. How does deflation impact consumers?

    Deflation impacts consumers positively in the short term but negatively in the long term. In the short term, deflation essentially ... Read Full Answer >>
  6. When during the economic cycle should I invest in the banking sector?

    The banking sector is known as a non-cyclical sector. While it trends in the same direction as the broader market, its volatility ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Markets

    Great Company Or Growing Industry?

    Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
  3. Economics

    International Financial Reporting Standards (IFRS)

    International Financial Reporting Standards are accounting rules and guidelines governing the reporting of different types of accounting transactions.
  4. Economics

    Gambling on Macau: Too Risky?

    Macau was once heralded as the new Las Vegas for casino investors. Is it too late?
  5. Mutual Funds & ETFs

    6 ETFs to Fight Your Recession Jitters

    Are you worried about a recession? If so, consider these 6 ETFs.
  6. Economics

    Understanding Economic Order Quantity

    Economic order quantity is an inventory-related equation that determines the optimum order quantity that a company should hold in its inventory.
  7. Economics

    What is Net Margin?

    The ratio of net profits to revenues for a company that shows how much of each dollar earned by the company is translated into profits.
  8. Investing Basics

    What is a Stock Option?

    An employee stock option is a right given to an employee to buy a certain number of company stock shares at a certain time and price in the future.
  9. Economics

    Worried About a Recession? Then Buy These 5 Stocks

    What makes these stocks so resilient? And how did they perform during the last crisis?
  10. Economics

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center