The Death of an Industry (or not)

 According to IBISWorld, a respected economic, demographic and government research company, Manufactured Home Dealers are one of the top 10 key industries that are dying in the United States. In their special report dated March 2011, over 700 industries were researched. The report stated that there are life cycles that industries go through, which are growth, maturity, and decline, and that even in a recovery declining industries will continue to underperform.

Of those identified as the top ten, Manufactured Home Dealers ranked 3rd in revenue fall off, declining 73.7% from 2000 to 2010, only behind apparel manufacturing at 77.1% and Record stores at 76.3%. Projections from 2010 to 2016 propel Manufactured Home Dealers to number 1 on the list, projecting a further decline of 62%, with Record Stores and Photofinishing a distant 2nd and 3rd at 39.7% and 39.1%.

Evaluating these Industries based on number of establishments, Manufactured Home Dealers had 3,968 in 2010. From 2000 to 2010, Manufactured Home establishments declined 56.7%, ranking 4th on the list. The forecast from 2010 to 2016 places Manufactured Home Dealers at the top of the list again with a projected decline of an additional 58.7%, with Video postproduction services trailing at 37.8% and photofinishing at 33.3%. If this prediction holds true, less than 1,700 Manufactured home establishments will remain by 2016!

The report singles out the Manufactured Home Dealer’s demise based on lack of product change, stating manufacturers have only made cosmetic changes and these changes have not been significant enough to lengthen the life cycle. This industry stagnation doesn’t delegate all players to extinction though. Those that focus on niche markets and dominate the markets of where the competition has diminished could gather some profits.

More importantly, how will manufacturer’s respond with product evolution that buyers, lenders, and appraisers will support? The Manufactured Home Dealer network has historically been a successful channel of distribution for manufacturers. Without it, sales numbers will continue to dwindle and more manufacturing facilities will close. There are thousands of capable career professionals working at these Dealerships. Product innovation and development could resuscitate the patient and stabilize an industry that, by the opinion of those that report to business decision makers, is a dying breed. Does this new widget rise from the ashes as a manufactured home? What is that innovation, that paradigm in factory-built housing that will wake up the giant searching for evolution? We have an idea, now will the industry embrace it? What ideas do you have to advance the industry’s cause?

By Otis Orsburn
hybridCore Homes

Otis is 40+ year veteran of the factory-built housing industry and is Vice President of hybridCore Homes, an innovative startup company offering site built homes with factory built cores. He can be reached at 707-523-3673 x 109, email: otis@hybridcorehomes.com. The company website is www.hybridcorehomes.com