The 15 businesses and industries that make money during recession are among those that are either part of the non-cyclical sector, which means that they always make money due to the fact that people require the products and services provided by these industries no matter what the economic situation is, or they represent products and services that are more in demand during periods of downturn.
Naturally, the economy moves in cycles. There are periods of growth and periods of recession. While most businesses are thriving when the economy is growing, when recession comes, things get tough. However, like it is during war, when there are companies that enjoy strong growth, during recession some businesses also register higher profits.
The last recession is still fresh in our memories, as many industries were hit hard between 2009 and 2010 and most businesses struggled, with many large companies either going bankrupt or getting very close and requiring substantial aid from governments to survive.
What the recession also showed is the importance, or lack thereof, of what consumers consider non-essential products, which saw substantial drops in sales. It’s well-known that the recession led to a drop in the construction sector, which in turn led to a decline in other tangible industries. According to Sageworks data presented by CNBC, the building materials industry saw a decline in sales of 3.28%, while lumber and other construction materials wholesalers’ revenue declined by 3.07% between 2009 and 2010. Cement and concrete manufacturers registered a drop in sales of 1.67%. The sales of furniture and home furnishing stores fell by 0.54% and 3.27%, respectively.
Among other businesses, sellers of RVs, boats, motorcycles and other vehicles (excluding cars) saw their sales plummet by 2.59% as consumers shied away from expensive purchases. Office supplies stores also took a hit, although their sales inched down by just 0.40%, as other businesses and consumers decided to save on costs.
On the other hand, there are businesses and industries that make money during recession. For example, as consumers decided to cut back some expenses by eating less often at expensive restaurants, fast food chains saw more sales. For example, McDonald’s Corporation (NYSE:MCD) saw its sales at stores open at least 13 months increase by 4.6% in August 2010, as the company based its recession business model on low prices.
In addition, even though people’s income drops during recession there are products and services that people require notwithstanding their income. Food, electricity, and water are just a few items that are non-cyclical and see their sales relatively unchanged. Stocks of companies that are involved in non-cyclical businesses are lagging behind others during periods of economic growth, but they tend to do very well during periods of economic decline as businesses such as these 11 Recession-proof Businesses You Can Start Now make money during recessions.
With this in mind, we have compiled a list of 15 businesses and industries that make money during recession. In addition to the usual non-cyclical businesses, there are also businesses that provide products and services that serve as replacements for more expensive alternatives. The list begins on the next page.