Top 5 Industries That Are Virtually Recession-Proof
After years of consistent economic growth, we may be facing the downturn of another recession. In March 2020, more than 10 million Americans filed for unemployment. Businesses have shuttered doors, retirement plans have upended, and families have tightened budgets with parsimonious efficiency.
The National Bureau of Economic Research (NBER) defines a recession as “a significant decline in economic activity spread across the economy” that lasts for a few months. As such, it’s too early to say if the coronavirus economy will join America’s other historic recessions or how the global markets will fare.
With job security no longer secure, many workers are looking for jobs in those fabled recession-proof industries.
1. Consumer staples
No industry is truly recession-proof. As spending declines and economic activity slows, most industries feel the pinch. “Recession resistant” is a more accurate term, and if there was a poster child for the recession-resistant industry, it’s consumer staples.
People always need food, deodorant, toothpaste, detergent, toilet paper, and dish soap. Such goods remain in demand in both bear and bull markets. The retailers selling consumer staples also remain steady during recessions, especially if they are perceived as discount or bargain.
Like consumer staples, the health-care industry remains an earner during recessions and for the obvious reason that people need healthcare to live.
However, some sectors don’t fare as well as others. Family physicians, for example, can see declines as patients forgo preventative care to save funds.
This recession may prove different, though. With the Affordable Care Act in place, millions more Americans have insurance policies that aren’t tied to their jobs. This may help the health-care industry weather the recession better than before.
Education is always in demand, but where people find and spend for that education changes.
According to the U.S. Bureau of Labor Statistics, during the last recession, enrollment in postsecondary education increased, especially at community colleges. The industry sported a 9 percent growth rate. That’s faster than any other consumer-related employment during that time.
How education will be affected by the coronavirus market remains to be seen, but advances in tele-education may help the sector in times of social distancing.
You’ve no doubt noticed the pattern: Recession-resistant industries are those that provide a good or service in demand regardless of the economic climate. Utilities certainly fit that description.
We need water and electricity to flow into our homes. We need someone to haul away the waste we produce. And increasingly, we need telecommunications to work from home.
With that said, the coronavirus market may alter that script. With people staying home and away from restaurants and big retail stores, utilities like electricity may see a down tick in the coming months.
Maybe the public sector doesn’t count as an industry, but it has its benefits. One of those is better job security.
According to the NBER, public-sector workers have a lower chance of losing their jobs than those in the private sector. That’s true for all levels of government and during non-recession periods, too. That difference only widens during times of recession.
No recession is like another
Many other industries can survive, or even thrive, within a recession. Repair shops and DIY retailers see increases as people prefer to fix rather than buy new. And sadly, the repossession and bankruptcy industries will have their calendars full.
But there is no guaranteed recession-proof industry. That’s because no recession is like any other. The Great Recession jump started with the cataclysmic implosion of the financial industry, but that industry hasn’t been hit as hard by the coronavirus market (yet). Meanwhile, biotech firms have done better than average as speculators pump in funds to combat the pandemic.
As such, it’s not enough to get a job in a recession-proof industry. We must also steel our careers, find better ways to cope with cutbacks, and improve how we help others during turbulent times. If we can manage that then people, not just industries, may be more recession-resistant, too.