As the global economy continues to tumble and fears of a recession that will eclipse the one seen in 2008 continue to mount, it has quickly become apparent that not all trades and industries have been equally affected. While some have attributed the apparent weakness of some industries and the apparent resilience of others as the results of the unique conditions that have created the current economic climate, the real answer lies deeper.
Many of the industries emerging as the most solid and recession-proof in 2020 are the exact same that have weathered economic storms throughout modern history, and will likely continue to thrive well into the future. Let’s take a closer look at the sectors that have proven time and time again that nothing can keep them down, and what we can learn from them in the months and years ahead.
1. Computer Systems Design
Ever since the dawn of the household computer, the industry for computer systems design has continued to grow unabated, riding out several recessions without experiencing any significant dips in growth. The systems design sector, which includes the design and production of microchips, circuit boards, and integrated software, saw some of its best years at the height of the last recession, with annual growth for 2008-2011 averaging at around 20%. As companies and households propel towards automation and digitised services, this sector is predicted to continue enjoying double-digit growth well into the future, despite the movement of the markets. The success of this industry highlights the benefits of constant innovation and expansion.
2. Alcoholic Beverage Wholesaling
It should come as no surprise that, in times of difficultly, people tend to reach for the bottle. The alcoholic beverage sector has not seen a single year of contraction in decades whilst some of the best years on record in terms of sales and revenues are to be found at the height of major recessions. Of course, it’s not enough that this sector is simply filling an age-old human need. The sector has shown remarkable resilience over its ability to constantly adapt to changing market and regulatory conditions, as well as being able to keenly identify cultural trends and exploit them. This ability to stay fresh has kept the alcohol industry in rude health since its foundation.
3. Financial Services
Financial services and activities of all types, from facilitating money transfers to trading currencies on the global marketplace, are an essential component of the global economy. Without a dense and highly reactive financial services infrastructure, the global economy would simply collapse overnight. It is for this reason why the financial services sector has generally performed excellently during adverse market conditions, even during years when stock markets have plummeted. Of course, certain sectors of the financial services industry have had to demonstrate flexibility and innovation to stay on top. Even the multi-trillion-pound foreign exchange (forex) trading industry has changed with the times, moving online, opening itself up to rookie traders and offering the best forex bonuses to attract new talent in what has become quite a competitive market. Meanwhile, fintech startups continue to compete for the most innovative new take, and consumers are increasingly interested in moving away from traditional banks and embracing such pioneering apps and platforms. This kind of openness is exactly what has kept the financial services sector in good shape.
4. Health Care
We all need healthcare, without exception. From the painkillers we buy from the pharmacy to the surgeries we receive at the hospital, the healthcare sector is one that all of us rely on. As such, it should come as no surprise that the size of the sector and the revenues associated with it have grown exponentially over the years, with even the most seismic of recessions doing nothing to change this. In the past decade alone, revenues from healthcare products have grown at an annualized rate of around 14%, while revenues for emerging sub-sectors such as healthcare technology have grown at a rate of more than 18% year-on-year. Few other industries could dream of such growth, let alone during a recession. This means that the healthcare professionals that keep the system running, such as doctors, GPs, nurses, pharmacists, and therapists, need never have to worry about being out of a job, even in the direst of economic situations.
5. Education Services
History has shown that nothing will curb the human appetite for learning. The demand for educational services, from teaching to e-learning software, has skyrocketed over the past two decades, with virtually uninterrupted growth seen across the sector. While one could look at ever-expanding university student numbers and high school classroom sizes as evidence of this, it is also worth noting that a significant chunk of growth in recent years has been focused on the private sector. Thanks to innovative entrepreneurs discovering new ways to learn through online courses, virtual reality classrooms, and brain training apps, the education sector has seen double-digit revenue growth. The global e-learning industry alone is now worth $165 billion, following annualized growth of around 10% for the past five years. This goes to show how far noble intentions can take a business.
6. Heritage Luxury Brands
This one often comes as a surprise, as people tend to think that a recession means that far fewer people will be willing to countenance dropping £100k on a watch. However, research has shown that in times of both boom and bust, respected luxury brands always fare well. Part of this is because the assets this industry is selling have a value that goes beyond status and price tags. According to the Financial Times, longstanding heritage brands often gain during a recession at the expense of less-known, newer luxury brands. During the last recession, legacy brands such as Rolex, LMVH, and Cartier actually saw sales increase compared to the pre-crash boom. A Rolex watch, a Hermes handbag, or a Dior gown is an investment. They are insurable assets that are likely to appreciate in value or at least retain a significant portion of their value. What’s more, research from Luxury Society has shown that wealthy buyers tend to become more discerning during a recession, meaning that the brands with the best reputation get all of the custom. Heritage luxury brand names are synonymous with quality, durability, and reliability, which is exactly why this industry has always thrived.
These are the industries and sectors that will likely make it through the next ten recessions unscathed. Perhaps it’s time to start dusting off that CV.