Manufacturing activity continues to move in an upward trend, resulting in demand for magnets naturally rising along with more output. While global manufacturing firms speed up production, the market for permanent magnets is expected to increase to $18.8 billion by 2018, according to MarketsandMarkets.

Expanding at a compound annual growth rate of 8.7 percent from 2013 to 2018, the permanent magnet market is expected to be bolstered through purchases for industrial and domestic applications as well as demand for miniaturization.

While growth in the permanent magnet market has been slow to pick up in the past due to supply chain disruptions, the market is bouncing back after countries outside China have boosted their production efforts.

"Globally, other countries have also started mining rare earth oxides so as to reduce their dependence on China," the report said. "The initiatives and efforts of western governments might bear fruit in future, and these issues may be sorted in the next five to ten years."

With the market projected to reach over $18 billion in the next five years, small and large markets will be able to benefit thanks to its fast moving development.

"Though the market size is large in Asia-Pacific, it is growing at a fast pace due to rising demand from end-user industries, especially in countries such as China and Japan," the market said. "The market is growing slowly in Europe, but will continue to grow at a significant rate in the North American region."

Permanent magnets used for hybrid car motors
Automotive companies like Lexus use permanent magnets to build hybrid vehicles including the new 2014 Lexus GS 300h hybrid, according to EarthTechling. This hybrid improves fuel economy by 35 percent compared to the previous model. The permanent magnet within the electric motor helps powers the car, reaching a top speed of 131 miles per hour.

The magnet is used to turn the motor along with tooth-like projections to help with rotation, according to NMB Technologies Corporation. This new technology was developed after variable resistance motors were replaced with magnet motors after engineers found these type of motors could do the same job with a magnet. The use of magnets then led to the development of the hybrid motor, which combines permanent and variable types of motors. Permanent magnet motors are considered to be highly effective and also less expensive than hybrid motors.