|
Recession is a dreaded word in
economic parlance. 2008 has proved to be a watershed year for
many large multinationals. Investments banks are shutting their
shops, private banks are getting nationalized, other financial
institutions and companies have to depend upon bailout package
from government to survive this credit onslaught. Worldwide,
cash and credit has become major cause of concern, investments
are drying up and growth in industries and services are
witnessing freefall. Many people are losing their jobs because
of cost restructuring plans run by their companies. Most of the
industries are facing serious troubles in running their
operations. But even in this gloom and doom scenario, there are
several industries who have managed to keep recession at bay.
Economists have identified few industries as recession-proof
industries. Economic rationale behind these industries being
recession proof is their low income elasticity of demand. Most
of the goods and services produced by these industries are
constantly in demand irrespective of economic situation. These
products and services always find consumers, completely ignoring
the global economy. Goods and services can be segregated in
several parts but those who are always in demand are mostly soft
goods.
Even within same industry, demand could vary. Like, many
consumers goods are always purchased by people because they are
more of necessity of daily life like, toothpaste, shaving cream,
shampoo, soap etc. But in case of high priced durable goods like
jewelry, demand reduces significantly.
Some of the industries believed to be recession-proof:
Medical Services / Health care
Entertainment
Debt collection
Oil
Pharmaceuticals
Necessities like food, grocery stores etc.
Energy
Electric
Gas
Cosmetics
Education
Home Repair
Vehicle repair & maintenance
Tax preparation / simplification
Career/Job search/Life coaching
Security/Alarm services companies
Funeral homes
Auctions
Air Conditioning/Heating
Plastics
Emergency Services like Police, Firefighter, Paramedic
These industries are considered as recession proof because of
their relevance in our day to day lives. Even economists suggest
investing in stocks of these sectors because of their low
sensitivity to economic turbulence compared to other aggressive,
fast growing sectors. Author - Mritunjai kumar,
expert economist and prolific writer..
|
