The stock market has experienced a tough fourth quarter of 2018 and there are numerous talking heads bringing up the possibility of a recession. I’ve lived through one during college and a second that started five years into my working career. A recent question came up on twitter and it made me realize most people under the age of 30 haven’t really experienced a recession. A twitter exchange led Olivia to ask this question:
What are your favorite recession proof industries/jobs?
— Olivia Bird | Birds of a FIRE (@birdsofafire) December 7, 2018
Have heard higher ed -> ppl going back to grad school during a recession.
Discount consumer staple stores -> Dollar General, Aldi, etc.
Any others?
I had the unique perspective of providing banking services to entrepreneurs during the last downturn. Most of this time was spent handling challenging loans or watching good companies learn to make it with less revenue. However, a few businesses/industries stood out and did surprisingly well during the same time. The list below is not an all inclusive list, but some observations I remember from that time.

Heating and Air Technician. Lets face it, the weather will likely be both hot in the summer and cold in the winter in most parts of the country. Air Conditioners and Furnaces have a useful life and they will break. The service business is dominated by companies (and individuals) who have built their reputation through a combination of good work and solid marketing. When people’s heating or cooling breaks, they will deem it a necessary expense and fix it. The same goes for businesses, who may even put off replacing an ailing unit if a costly repair can delay that expense for another year or two.
What are the risks? There are some companies/people that are in the business of installing new heating and air units. Their business will be down and some of the people will be compete for service work. There will also be lower occupancy in retail and commercial buildings, equaling less use/pressure on existing units.
Food Distribution: People will continue to eat and distributing produce, frozen foods, or dry goods to grocery stores will continue. Distributors are also not in the business of taking pricing risk, they buy from the producer and sell to the retailer, taking a small margin along the way to support the company’s operation. Jobs in this business can range from corporate support jobs to warehouse jobs and transportation.
What are the risks? If the company you work for is heavily concentrated in restaurants instead of grocery retailers then they will be impacted by lower discretionary spending.
The Movie Business: Motion pictures do the best during times of economic recession. The arguments for why go from movies being a trade-down entertainment option to simply more people having more time to be creative. The box office’s golden era was in the 1930s and the industry had record years during recent recessions in 2001-2003 and 2008-2012. The movie studios collect around 60% of box office revenue to support its production cost while the theater keeps 40% of ticket sales plus all concession and other revenue.
What are the risks? The direct to consumer options of Netflix, ect all are alive and well. These entertainment forms focus more on series than feature films and at the time of writing, the only way for a movie studio to recuperate a nine figure investment is through the sixty day exclusive viewing window provided by major theaters.
Pawn Brokers (NOT payday lending): The pawn broker is the oldest form of short-term lending. Many people think of pawn stores as either seedy shops located in not-so-great parts of town or the glamorous business portrayed by the Gold & Silver Pawn Shop on the History Channel. The real answer is somewhere in between. Pawn brokers provide short term loans against an item held. This item is provided as collateral and if the loan isn’t paid, the item is sold and the pawn broker gets the cash and eliminates the loan. Unlike all other forms of lending, the pawn broker does not report a defaulted loan on someone’s credit and the pawn broker takes the risk of collateral value. If they loan more than the item is worth, the pawn broker takes the loss and can’t pursue the borrower for the deficiency.
What are the risks? Pawn brokers are usually family owned business and tough to get into. There are occasionally large chains that try to appear, but usually an entrepreneur managing their own money is more successful than a corporate enterprise. Its an emotionally tough business, every client will have a story and plead to maximize the loan amount they can get for an item. As a former client of mine once said: “The toughest part about the pawn business is a pawn broker with a heart is a pawn broker without a business”. This particular family chose to donate heavily to a local human services not for profit and refer tough cases to the agency so clients could be helped by professionals.
Septic Service: There’s a large part of the country that use in-ground septic tanks instead of public sewers. These tanks hold your household waste and slowly disperse it into the septic field in the year. Unfortunately these tanks fill up and require pumping. When people are staying at home more than going to work, the tanks fill up quicker. Its a mandatory expense when the tank stops working because it means the toilet won’t flush!
What are the risks? There aren’t many national companies you can work for in this business. They are primarily family owned and you’re at the will of the management talent of the family. Oh, its also a crappy job… Its just a crappy job.
Automotive Parts & Repair: The average age of a vehicle continues to rise in the United States. There are a number of reasons for this, but it is generally because vehicles are better made today than twenty years ago and also require a higher dollar investment when purchased. The average age of vehicles jumps during a recession as new car sales drop when people delay making purchases. When people are driving their cars longer, they require more car repairs and repair parts. Businesses also delay purchasing new vehicles and will pay more for repairs.
In addition to working as an employee directly repairing cars, working for one of the major automotive parts stores or suppliers/distributors are safe jobs in a recession.
What are the risks? Electric cars use less parts than a gasoline powered vehicle, some estimates range as high as 90% fewer moving parts.
Auctioneers: The typical auctioneer grinds out a career doing small estate sales when a family is trying to dispose of someone’s stuff. The auctioning business booms during a recession. Banks, landlords, and other people who are owed money turn items held as collateral into cash to repay debt. The auctioneer takes anywhere from 10% to 30% depending on the size of the sale and the scope of services offered.
What are the risks? It is tough to make a living in this business in a normal economy. The networking for business with banks and creditor’s rights attorneys must be done before times turn bad. Many entrepreneurs will enter this space and attempt to get into the liquidation business and the people making the hiring decisions will be overwhelmed with solicitations. This same comment applies for legal counsel and real estate agents. If they are interested in getting into creditors rights or selling properties for banks, they need to do their networking when the economy is great, not after things turn bad.
Do you have any businesses/jobs you’d like to mention as recession resistant? Please leave a comment below!
I am happy to see septic service on the list. I always think that would be a great business… limited competition, minimal (?) startup costs, can be started with self and maybe 1 person. I may need to look into this more.. 🙂 Ok, not everything is roses…
The hours aren’t bad either! You have to discharge those trucks at municipal waste stations that only operate during government hours. It’s a tough business to scale, it’s hard to find people to do the work if you don’t want to do the pumping!
Good point! This is looking better & better.