The Sports and Fitness Industry Association (SFIA) released its 2016 State of the Industry Report (SOTI), which showed another moderate year of industry growth despite major disruption in the sporting goods sector.

“Our industry is in an era of mixed signals and of course unprecedented disruption,” said Tom Cove, SFIA president and CEO. “There is no question that we’re facing a tough marketplace, but our data shows there continues to be growth across the sports and fitness industry. While declining numbers in core team sports participation are a cause for concern, we did see an overall uptick in total team sports participation. Furthermore, retail has been disrupted in a way no one could have predicted, but in 2015 for the third year in a row our industry saw 2 percent growth.”

Mixed signals include: more casual participation, but less core sports and fitness participation; more athleisure sold, but less performance wear sold; more footwear sold, but less equipment sold and significant retail contraction, but ongoing pockets of retail sales strength. Total team sports participation numbers trended positive in 2015, but core team sports participation continued to decline.

“Youth sports participation is the foundation of our industry for the next 50 years,” commented Cove. “The decline in core participation is alarming; if we don’t turn that decline around the industry as a whole will face problems.”

This year’s report does a deep-dive analysis of millennials and their purchase and participation habits. Millennials are becoming the most powerful consumer segment, accounting for 25 percent of the U.S. Population and nearly $200 billion in annual spend. Research shows that millennials seek authentic experiences and place an emphasis on experience over goods.

“There appears to be a fundamental change in the athlete of the future,” said Cove. “Social activities are beginning to drive sports participation and sharing through technology helps create connections.”

Other analysis provided in this report cover: topline participation, consumer spending on sports and fitness, retail sales on year end 2015 and year to date 2016, wholesale shipment results and trade update; and a look ahead to the future of retail. The three fastest growing sports in terms of three-year participation rates remain unchanged. Stand Up Paddling, Adventure Racing and MMA for Competition are quickly transitioning from fads in to sustainable sports categories.

This year’s report also includes in-depth interviews with: Jim Weber, chairman and CEO, Brooks Running; U.S. Senator John Thune, lead sponsor of the PHIT Act and Art Chou, co-founder and managing director, Stadia Ventures.

To purchase the SFIA 2016 State of the Industry Report, click here.