By Julie Glover, Professional in Residence
In March 2020, when most of the country “shut down,” many thought it was a temporary measure and some considered it overly cautious. As the weeks have turned into months, many businesses and institutions are still completely, or partially, shuttered.
Buxton monitors and quantifies the impact of COVID-19 on a variety of industries in our Consumer Impact Dashboard. Not surprisingly, the restaurant, retail, travel and hospitality industries, which were completely closed, have taken most of the hit; grocery, beer, liquor, and wine sales soared.
Once people started staying home, and stopped spending as much money as before, the natural next step was the recession we are currently experiencing.
Many community leaders may be wondering what to expect as we continue to navigate the challenges of the current economic environment. While no one can predict with perfect accuracy, the following trends provide some insights into which industries are likely to thrive in spite of the challenges during the months ahead.
Looking to the Past: Recession-Proof Businesses
Historically there are some industries and sectors that do better in a recession than others. Typically, utilities, health care and consumer staples remain steady during an economic downturn because people need water, power, medical services, and food, no matter what else is happening in the economy.
Industries that did well in the 2008 recession included discount retailers, healthcare, consumer staples, freight and logistics, Do-It-Yourself projects and repairs, and food and restaurants.
Current Trends: Industries Defying the Odds
Currently, companies that supply services which support online shopping, work arrangements, teleconferencing, and at-home substitutes for traditional services have huge opportunities. Pharmaceutical, e-commerce, home improvement, patio and backyard improvements are all on the rise as well.
Many people are having a “stay-at-home” summer this year. They are investing in their homes and leisure activities that they can enjoy with their families, such as above-ground pools, hot tubs, landscaping, and home exercise equipment. Travel trailer rental and sales, camping equipment, and road trips to remote locations, such as state parks, are on the rise.
Companies involved in software or 5G are doing well, as people and companies make the shift to work from home, hold meetings online, and offer goods and services via delivery. Even after the pandemic has passed, as people and businesses shift their thinking more toward remote working, these sectors should remain strong.
The Bottom Line
As a country we have been through 17 recessions and depressions since 1797. The history of recessions in the United States shows that they are a natural, though painful, part of the business cycle. We will come out of this one changed again, but Buxton is here to help you navigate the changes and come out on the other side stronger than ever.
To keep a pulse on the health of your local economy, assess the consumer impact in your community and which types of businesses are being affected. Learn how Buxton’s Consumer Impact Dashboard can help.