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Recessions are tough for most people. Businesses may downsize, workers worry about layoffs, and households often tighten their budgets. But not every industry suffers during economic downturns.
Some businesses actually thrive during a recession, either because they provide essential services, help people save money, or offer affordable alternatives to higher-cost options.
Here are nine sectors and professions that tend to hold steady or even grow when the economy slows.
Key Takeaways
- Not all businesses and industries feel the same pain during economic downturns.
- Some businesses benefit as consumers cut back on various products and services. These companies may offer cheaper alternatives to luxuries or discretionary purchases.
- Other businesses that do well during recessions provide the consumer staples that are needed by most people and that they must continue to buy.
- There are also fundamental services that consumers can’t do without, even in hard times.
1. Accountants
No matter what the economy is like, individuals and businesses have to pay taxes and keep their finances in order. In fact, when money gets tight, accurate financial management becomes even more important.
Accountants are likely to experience an increase in business during a recession. That’s because many people and small businesses may require the help of a professional to ensure they’re making use of all of the tax benefits that are available to them. They may need professional guidance that ensures that they have a clear understanding of their income and expenditures as cash flow tightens.
New tax laws or government aid programs, which often appear during downturns, also create opportunities for accountants to guide clients through changing requirements. They can help people navigate the benefits of these changes for their businesses and personal finances.
At the very worst, some people may require the services of an accountant if they’re forced to file for bankruptcy.
2. Healthcare Providers
Healthcare is one of the most recession-resistant industries. People still get sick or need medical care regardless of economic conditions.
While elective procedures might decline, demand for essential medical services remains steady. Jobs in healthcare, including doctors, nurses, home health aides, and technicians, are often more secure than roles in other industries during economic slumps.
3. Financial Advisors
People who have substantial assets or assets that are crucial to their well-being want to ensure that their money and property are well taken care of, especially during a recession.
Financial advisors often see an increase in demand for their work as people become concerned about the stability of their investments and seek guidance on how to protect their assets.
Beyond matters of personal finance, businesses also seek advice and insight regarding current and future economic trends or paths to recovery.
Economic Uncertainty
When the future of the economy is in doubt, demand for financial and economic advice from a range of professionals goes up.
4. Auto Repair and Maintenance Technicians
In tough economic times, people are less likely to purchase a new car. Instead, they’ll repair their current car. Auto repair and maintenance shops can do quite well during a recession.
One counterexample, however, is the Cash for Clunkers program that was instituted during the Great Recession, which spurred a modest spike in new car sales.
5. Home Maintenance Stores
Many people will choose a do-it-yourself (DIY) home renovation or upgrade rather than consider selling and moving during a recession. Depending on credit conditions, borrowing to buy a new home is usually not an option for most people during a recession.
Companies in the business of providing tools and materials for home improvement, maintenance, and repair projects are likely to see stable or even increasing demand during a recession. So do many appliance repair service people.
New home builders, though, do not get in on the action. They are among the worst hit as bank lending gets tighter, demand for new homes dries up, and home sales slump.
6. Home Staging Experts
It can be difficult to sell a home during a recession, but some people have to do it. People who specialize in home staging thrive as the housing market becomes increasingly competitive.
Home staging specialists might be real estate agents or interior design professionals, or both. A staging expert increases the appeal of a home—and the likelihood of a sale—by furnishing and decorating it to look its best to potential buyers.
7. Rental Agents and Property Management Companies
People who may not be able to afford to buy a home during a recession, and people who were forced to sell for financial reasons, still need a place to live. The answer for many, at least in the short term, is a rental.
Rental agents, landlords, and property management companies can thrive during a recession, when renting is likely to become a more appealing housing option.
Roommates
Recessions often lead to an increase in shared living arrangements. Many people move in with parents or extended family members.
8. Grocery Stores
For many, dining out during a recession becomes a financial extravagance at a time when money may be short. Supermarkets often see an increase in sales as people choose to cook more meals at home and entertain their friends at home more often.
9. Bargain and Discount Stores
People cut back on luxuries during a recession, but that doesn’t mean they avoid spending on items that aren’t strictly necessary. There’s even a tongue-in-cheek economic theory called the Lipstick Index, which argues that sales of cosmetics will always rise during bad times because they’re a relatively affordable luxury.
When a recession reduces sources of income or threatens livelihoods, people look for less expensive products, whether they are discretionary or not. Importantly, for products considered staples—those items needed every day by individuals—bargain and discount stores offer solutions.
Bargain and discount stores see a great deal of traffic in a tough economy. People from all economic classes, including those who otherwise would never step into a dollar store, rethink their shopping habits when a recession hits.
How Can I Invest in Rental Properties As a Recession Opportunity?
You can start by investigating real estate investment trusts (REITs). REITs invest in multiple structures and holdings that may perform better in tough times. In particular, you may want to focus on rental real estate, where rental income is stable and perhaps high, given the need for people to have a roof over their head after they’ve sold their previous dwelling.
How Can I Invest in the Healthcare Sector?
Consider exchange-traded funds (ETFs) that contain a variety of healthcare holdings, from hospital companies to medical supply companies. Diversity is key, as some sectors—for example, elective surgeries—will likely underperform due to recessionary conditions.
How Can I Take Advantage of the Turn to Do-It-Yourself (DIY) Products and Retailers?
Look into an ETF that covers the home improvement sector, with investments in companies such as The Home Depot, Inc. (HD) or Lowe’s Companies, Inc. (LOW). Beware of any home building companies, such as Lennar Corporation (LEN) or Hovnanian Enterprises, Inc. (HOV), which are likely to bear the brunt of any downturn as new home sales slump during a recession.
The Bottom Line
A recession doesn’t impact every business the same way. While many sectors struggle, others prove more resilient by meeting basic needs, offering cost-conscious options, or providing financial and professional expertise.
Understanding which industries perform well in a downturn can help you make smarter career moves, business decisions, or investment choices. Look for essential services and budget-friendly alternatives and you might just find opportunity in adversity.
