Recession is a temporary decline or general slowdown in economic activity as indicated by the fall in the macroeconomic indicators like GDP, investment, spending, capacity utilization, employment, profit, household income and rise in bankruptcies and unemployment. A recession is mostly caused by excessive drop in spending or an economic bubble burst, which is also known as crash, and refers to a sudden drop in prices. Recession is the consequence of adverse demand and supply shock. Most of the industries are unable to cope with the situation and ultimately start retrenchments, which in fact help accelerate the process of nearing their closure. Whereas experts are skeptical about the existence of recession proof industries, they do endorse the existence of recession resistant industries. Some unexpected reactions have been noted during recession and quite a few hidden aspects of human nature have also come into light during recessions. It is notable that human beings do not cut off the expenses of their pets ,who do not know about recessions, and their owners do not want them to suffer on account of recessionary economy.
1. Film Industry
The film industry is one of the recession-proof or most recession resistant industries. Apparently it sounds weird, but the statistical data of box office figures reveal the fact that this industry provides the people a breathing space during tough times. People want to escape from depression which follows recession, and this industry has something to offer for everyone and is also quite affordable. A film provides a virtual change of atmosphere, and one living under tough conditions of recessionary economy may experience the touch of luxurious lifestyle as in watching Titanic. There are films that tell very inspiring stories of ordeals and survivals. Governments, too, make use of the documentaries to boost the public moral; therefore, they encourage investment in film industry.
2. Veterinary services
Just like the philanthropists, lovers of humanity, and misanthropists, those who hate human beings, there are people who love animals and there are those who are cruel to animals. However, compared with the lovers, the others are only too less to dominate. The predominant animal lovers do not leave their animals alone even under the most adverse conditions. The earliest domesticated animals like horse, sheep, dairy cattle, dogs, cats have developed a close affinity with the human beings. The pet owners, particularly the dog and cat owners, can ill afford to see their pets suffering from the effects of recession, even when they themselves are constrained to suffer. Veterinary services and the industry related to the veterinary products, therefore, remain intact during recession.
3. Poultry processing
It is said that ‘we are what we eat.’ Given only the protein content in the profile of two persons, it is very easily identifiable as to who belongs to a developed or underdeveloped country. Poultry is staple food to Americans and most of the advanced countries and it is the protein gap which most apparently distinguishes between the privileged and the less privileged people. Importance of the nutritive value of protein from poultry is duly recognized, even during a recession, and statistical data has shown about a 2% increase in the poultry processing industry during recession.
4. Passenger Transport
According to the economic principle of substitution, people identify alternatives in the scarcity of the original and preferred sources when they become too expensive to be affordable. They try to find the alternate sources that can fulfill the same need. Statistical studies conducted during three recessionary periods indicated 12, 5% and 5% growth in the transport industry, when the people started using passenger buses in preference to the private cars. They found it more easily affordable and consequently it created demand for more passenger transport, resulting in the growth of the industry. Passenger transport is a recession-proof industry for many other reasons too.
5. Information Technology
An economic bubble is defined as a situation in which the asset prices fluctuate inconsistently from the intrinsic price and the situation becomes apparent when a sudden drop in prices appears. The economic bubble burst played a role in causing the recession in the 2000s, yet the notable aspect is that the IT industry itself remained the least affected by recession. An obvious reason for this resistant behavior is the versatility of this industry. Almost all the major industries need IT, both for hardware and for software. For day to day internal and external communications, big industries rely heavily upon the usage of fast-growing technology with a declining trend in the number of available professionals. The IT industry remains constantly in demand and this factor makes it resistant to recession.
There was a time when talking of education as industry was considered a bit rude and weird, but now everyone recognizes it as one of the most established and recession-proof industries. Recession invariably appears in the form of the unemployment and the public school teachers have the most secure jobs. Educated people want their children to be educated at all costs. Equally true is the fact that the uneducated people, on account of their first rate experience of the sufferings due to literacy, want their children to be educated. This is the basic cause of making the education industry as recession-proof.
7. Food Industry
All the living beings are food consumers and it is due to the widest consumer base that food always remains in demand. The food-related industry, therefore, remains the most stable industry even under the severe recessionary economy. Food is not a matter of option; it is an essential to survive and a matter of life and death. Whereas people do plan to cut their expenses in many other areas, budgeting of food remains almost unaltered. It is due to its widest consumer base that the food segment employs more than half of the total employees anywhere. States deepy affected by recession, like Michigan, recorded a 12 % increase in the food industry.
8. Health Care
Next only perhaps to the consumption of food, the most important consideration for people is health care. Since long ago, human beings have been at war with the viruses and pathogens, the disease-causing bacteria. People can ill afford to let them prevail at their will and are constrained to take corrective and preventive actions, regardless of the recessionary economy. In tough times people become more conscious and try to refrain from unplanned reproduction, which inevitably requires increased use of contraceptives. Depression follows recession, therefore an increased number of people need anti-depressants and over the counter medication. This accounts for the stable health care industry.
Importance of cosmetics, especially when it comes to women, is undeniable, even in the wake of toughest times of recession. Success stories of Mary Kay Ash, Estee Lauder, Essie Weingarten and Gabrielle Coco Chanel, and many others reveal the intrinsic potential of cosmetics. According to the economic principle of substitution, the consumers go for alternate products, which could fulfill their needs and this prompts increased R&D activities in the cosmetic industry during recession. Newly developed products, on launching, expand the product line and cause growth of the industry.
Versatility of the confectionery items can be assessed by the fact that whereas they are found in the lunch box of a school-going child of a slum area, they were part of the food carried by the astronauts during their mission to step on moon. During the Second World War, there was scarcity of sugar, therefore, confectioners used excessive quantities of liquid glucose as replacer and this yielded a much tougher product, known as toughie. This toughie later on evolved into one of the sweetest words in English language, the toffee.
Impacts of recession, when it occurs, is not felt simultaneously and equally by all segments of society. In fact, people do not realize its occurrence until and unless they are directly impacted by its adverse effects. It is said that recession is when your neighbor loses the job and depression is when you lose it. A few people have made history by surviving honorably, utilizing their extreme patience, perseverance and steadfastness in the testing times. Quick fixing solutions like raising taxes in the middle of recession is more injurious to the economic health of a country.