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The Recession List - Top 10 Industries to Fly and Flop in 2008

VoIP Providers And Corn Farmers Can Expect To Have Bumper Years In 2008 And Beyond, According To The Latest Research Released By Business Information

Analysts At IBISWorld

LOS ANGELES, March 19 /PRNewswire/ -- As the economy slides into recession, IBISWorld today announced its list of industries with strong growth forecasts expected for 2008. Voice Over Internet Protocol Providers (VoIP) is first of the top 10 industries which IBISWorld predicts to do well in 2008 and is forecasted to grow by 24.3 percent this year. Those in corn farming, foam product manufacturing, web search portal, and biotechnology fields, won't be far behind.

IBISWorld, Inc. ( is recognized as one of the nation's most respected independent publishers of business intelligence research. According to IBISWorld, the industries making up the rest of its "Top 10" industries to watch in 2008 are: remediation services, mining and oil and gas machinery manufacturing, environmental consulting, collection agencies, and oil and gas extraction.

VoIP Leads The Way

Subscriber growth will drive revenue in the VoIP sector, with numbers expected to rise by 21.2 percent this year to 16.6 million, while the number of establishments will jump by a significant 44.5 percent to 2,190 nationwide.

Senior analyst at IBISWorld, George Van Horn explained: "The VoIP providers industry will easily outperform the wider telecommunications sector this year, given that it is an emerging service which continues to gain greater consumer and business acceptance. As household broadband penetration increases, it will facilitate greater use of digital services, helping to improve the call quality of industry services. In fact, by 2012, we expect revenue growth of 90.2 percent, bringing total revenue to $4.88 billion. By the same time, we predict that the U.S. will have approximately 25.4 million paying VoIP subscribers."

And this year alone, revenue is set to grow an impressive 24.3 percent to $3.19 billion. As services improve and gain greater consumer acceptance, IBISWorld forecasts that many more providers will begin to turn a profit -- with Vonage leading the way. The U.S.'s largest VoIP provider is expected to become profitable for the first time this quarter.

Capitalizing On Corn

The robust outlook for the corn industry in coming years hinges on the now burgeoning ethanol industry, with demand set to continue and the number of corn plantings increasing to keep pace with demand.

"The outlook for corn farming is much stronger than for many other crops this year, with industry revenue expected to grow 4.9 percent per annum in the years to 2012, compared with 3.9 percent for soybeans, and just 1.6 percent for wheat. In terms of size, we expect the industry to expand by a solid 15 percent this year, with improving prices playing an important role in the sector's success," said Mr. Van Horn.

As a result of the Federal Government announcing its production target of 35 billion gallons of biofuels by 2017, ethanol production will grow to 7 billion gallons by 2010, up from 4.5 billion in 2006, boosting ethanol's share of corn demand from 22.6 percent to 36.1 percent. But, according to IBISWorld, the good times won't be endless, with oversupply likely by 2010, at which time prices will fall once again.

The Big Business Of Search

Web search portals will grow again in 2008, this time by 13.4 percent, with broadband connections also expected to rise by 15.1 percent.

"Between this year and 2012, we believe that industry revenue will increase by 56 percent as Internet penetration still has some way to go to reach full saturation in American households," said Mr. Van Horn. "Furthermore, broadband services will account for an ever increasing share of domestic Internet users, rising to 118.7 million by 2012, with an increasing share accounted for by fiber-optic and high speed cable lines."

"There has been some concern that economic weakness would lead to businesses cutting their advertising spending, which would affect the Internet," said Mr. Van Horn. "However, we estimate that Internet advertising will account for a greater portion of total advertising expenditure over the next few years given that it can be targeted, and the relative price per ad is often low. This will help to offset any potential weaknesses in overall advertising spending."

Booming Biotechnology

As consumers' attitudes toward biotechnology products improve, the industry is reaping long-awaited rewards, expecting to grow by 12.9 percent this year. Another factor influencing the biotechnology sector's success, according to IBISWorld, is improved intellectual property rights legislation -- and enforcement -- worldwide, as well as strengthened demand for medical and pharmaceutical products to cope with an ageing, and ailing, U.S. population.

Finally, rising demand for biofuels is good news for the biotechnology sector, with the Department of Energy estimating ethanol usage could reduce U.S. petroleum-derived fuel consumption by up to 30 percent by 2030. The biotechnology sector has allowed the U.S. farming industry to rapidly increase its supply of corn and soybeans -- the main inputs into biofuels -- by developing genetically-modified seeds which are resistant to pests and drought. And by boosting farm productivity, biotechnology plans a crucial role in ensuring that biofuel production targets are met.

Rich Resources Driving Manufacturing Growth

Increasing sales volumes and higher average unit selling prices will foresee growth in manufacturing machinery for mining and oil and gas fields increase by 9.7 percent this year. Mr. Van Horn said rising domestic demand, as seen by growth in the number of U.S. drilling rigs and increasing exports were underpinning sector growth, together with growth in North American and global mining production and exploration activity.

Forecast Favors Environmental Consulting Services

The fact that more and more construction, agriculture, and scientific companies are employing environmental consultancies is great news for the industry which can expect growth in the vicinity of 9.7 percent this year, amidst mounting public concern over environmental degradation and climate change. And while some companies are of course genuinely motivated by concern for the environment, for others, hiring consultants to appear to be "going green" has proven to be a useful marketing tool.

Growing government funding into renewable energy and technologies producing low emissions is also helping growth, as organizations investing in research and development in these areas are often major employers of environmental consultants.

Sub-Prime Crisis Boosts Profits For Collection Agencies

Rising delinquencies brought about by the current sub-prime crisis are not good news for many, except for collection agencies. As increasing amounts of bad debt are passed on to professional debt collectors, IBISWorld estimates that the collection industry will grow by 9.5 percent in 2008 and will continue to experience growth as long as delinquencies continue to mount. IBISWorld also believes that collection agencies will have opportunities this year to acquire new debt portfolios to expand their customer base.

Doom And Gloom For The Five Flops

At the opposite end of the spectrum, the following five industries have the dubious honor as IBISWorld's "bottom five" poor performing industries for 2008, based on their lackluster growth forecasts. They are: military armored vehicle and tank manufacturing; chicken egg production; emergency and other relief services; truck, trailer and motor home manufacturing; and (other) metal ore mining.

IBISWorld's George Van Horn said that the military armored vehicle manufacturing industry was coming down from the intense investment in the early years of the Iraqi occupation amidst growing public pressure to commence withdrawal of troops. This year, the sector is expected to decline by 22.9 percent.

Following the high prices of the last two years, a decline in revenue for chicken egg producers is anticipated this year in the wake of oversupply. Whereas the industry grew by 21.3 percent last year, IBISWorld forecasts negative growth this year of 22.7 percent -- a major correction.

Hurricanes Katrina and Rita resulted in a huge drain on government funding in 2005, and industry revenue has been progressively falling ever since, with negative growth of 22 percent expected for the emergency and relief services sector this year.

Slower growth in the U.S. economy this year will lead to poor performance from the truck, trailer and motor home manufacturing sector, with industry revenue expected to decline by 17.9 percent, while falling prices in metals are expected to push down growth in the other metal ore mining sector by 17 percent.

Other sectors likely to experience tough times this year include: small electrical appliance manufacturing, down 11.5 percent in the face of massive competition from China and other Asian nations; apiculture, down 11.1 percent; and copper, nickel, lead and zinc mining, down 10.6 percent.

According to Mr. Van Horn, mortgage and non-mortgage loan brokers will suffer on the back of the Sub-Prime crisis as many banks will be unwilling to lend to customers in the new tighter credit environment.

"Low growth and economic uncertainty will mean little initiation from customers who will be reluctant to extend themselves by taking out mortgages or other loans," said Mr. Van Horn, adding, "As a result, we expect the industry to experience negative growth of 10.1 percent in 2008."

About IBISWorld

Founded in 1972, IBISWorld provides a unique and extensive online portfolio of business research and analysis products designed to serve a range of business, professional service and government organizations. Delivered through enterprise subscriptions, the company publishes in-depth reports on more than 700 industries and offers profiles on more than 8,000 U.S. companies. In addition, the company provides databases of economic analysis, demographic data, and risk assessment reports relevant to virtually every business sector. IBISWorld's materials are valued for the breadth and depth of the research and analysis covering the entire U.S. economy, incorporating both financial and non-financial information impacting tracked industries and companies. IBISWorld Business Information is well known for its accuracy, consistency and timeliness. This is why almost all online information aggregators seek us out to include our reports as part of their global databases. Current IBISWorld partners include Hoovers, Valuation Resources, Superfactory and American Small Business Development Centers. With U.S. headquarters located in Los Angeles, IBISWorld has offices in New York, Melbourne, and Sydney. For more information, visit or call 1-800-330-3772.

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