In a recent study from Swyft Filings, the manufacturing industry showed a decent amount of new business growth, coming in 14th in the rankings across industries. Manufacturing business formation growth saw a 5.8 percent drop in 2018, compared to a year-over-year increase of 38.3 percent from 2016 to 2017.
The report suggests that this drop comes from a growing gap between larger and smaller companies. Larger companies can more easily expand their portfolios by purchasing smaller businesses or building new or larger facilities, while smaller companies compete to stay relevant as the larger ones expand. According to the report, demand for equipment needed for industrial activities is only increasing, including in the construction and oil and gas industries, but the larger companies that can cover the full spectrum of products needed for these operations push smaller companies out.
Technology has also made the field increasingly competitive, with customers looking for companies that provide digitization, innovative technology, and innovative products.
“Compared to the number of new manufacturing businesses formed last year, the second-annual Swyft Industry Report reveals that the manufacturing industry's volume of new businesses remained fairly stagnant, despite a slight decline in year-over-year growth. This stagnation may be due to the level of uncertainty around the US business environment and trade policies," said Travis Crabtree, president of Swyft Filings.
“I’m curious to see next year's results, especially as the industry adopts new and innovative technology. Entrepreneurs looking into the manufacturing industry should consider embracing digitalization and gaining a complete understanding of other relevant industries. This will make you an invaluable middleman for other businesses.”
The highest-growing industries by business formation in 2018 were accommodations, construction, and consulting.