This year, GHJ brought together experts Cameron Dayne (Fifth Third Bank), Stephen Cheung (Los Angeles County Economic Development Corporation) and Rachel Foltz (Endeavour Capital) for an Economic Outlook discussion.

The panel, moderated by GHJ Business Resiliency Task Force Leaders David Sutton and Emily Meiselas, led a lively discussion about inflation, supply chain and other factors affecting the economy.

Recession was a major topic during the event. Panelists discussed how businesses should prepare and respond to a recession regardless of their function or industry — even though function and industry influence how well a business survives or thrives during an economic slowdown.

As a follow up to this discussion, we asked the panelists: what types of companies are more likely to thrive during a recession?


Rachel Foltz (RF): A lot depends on the fundamental drivers of the recession. In general, I would say value industries:

  • Discount, thrift, private label or staple foods
  • Healthcare
  • Logistics businesses serving essentials
  • Maintenance and repair
  • Some areas of infrastructure in this case (given specific government funding)
  • Used consumer product markets
  • Utilities

Stephen Cheung (SC): It is hard to categorize how industries do during recessions as the nature of different recessions are different (pandemic vs. housing bubble vs. tech bubble).

During the pandemic, we saw that essential retail (grocery stores and online retailers of consumer goods) and certain types of tech companies (who were able to transition to remote work very easily) adapt well to the most recent recession.

Cameron Dayne (CD): When the economy takes a downturn, certain industries are more resilient than others. In fact, you could say that some sectors may actually benefit from a recession. A few examples include:

  • Healthcare: Even in the midst of a recession, the healthcare industry remains steadfastly reliable. Pharmaceuticals, biotech and health services continue to remain sought-after as individuals require medical assistance regardless of economic fluctuations. Throughout history, this has been demonstrated true; demand for these products continues to be steady while others experience a decline during tough times.
  • Consumer Staples: Items like food, drinks, household goods and hygiene items are seen as necessities that remain impervious to economic fluctuations since customers need them for their daily lives. Businesses in these sectors, or those that make essential or cost-effective products, may be more secure during an economic slump because people center their spending on what they must have instead of the extras.
  • Utilities: As one of the most resilient investments out there, utility stocks —including those in electricity, gas, and water sectors — are considered to be “defensive” picks. Even when economic conditions fluctuate, people will always need basic utilities; this is why these enterprises have reliable cash flows and predictable earnings, which make them especially attractive during a recession.
  • Discount Retailers: During an economic downturn, discount retailers and dollar stores can be the perfect answer to people’s budgeting problems. Since these types of outlets offer goods at a more affordable price, they become increasingly attractive to consumers looking for ways to save money while still enjoying some discretionary spending. Off-price retailers also tend to thrive during recessions as they can capture those seeking out value products.
  • Essential Services: During a recession, businesses that offer essential services, such as telecommunications, internet access and waste management, have the benefit of being relatively more resilient compared to other industries. People rely on these services for their daily living needs and communication requirements, which makes them vital during challenging economic times.

It is worth mentioning that even though these sectors often do well during a recession, there can be discrepancies within each industry and individual company performance may diverge. When it comes to analyzing the resilience of different industries during a recession, several variables come into play — for instance, the depth and length of economic contraction, overall market fluctuations, and world economic trends. Please also note that one must conduct an in-depth analysis before making any decision about investments. To get personalized guidance on investment decisions, consult with a knowledgeable finance specialist.


RF: One of the other panelists may be better suited for this one, since I am more familiar with small and mid-cap companies, which can do well or survive if capitalized appropriately. It is much riskier if small and mid cap companies are reliant on debt or rounds of equity funding to sustain a downturn. Look at proven business models that have been around for a long time and their performance during the last recession.

SC: From our data, whether a company performs well really depends on the sector. Non-essential retail, hospitality, restaurants, motion picture and sound recording (small, mid and large cap) all suffered, regardless of their size.

CD: Historically, small-cap and mid-cap companies have often been the ones to reap the benefits of an economic recovery in the early stages. In contrast, large-cap companies may do comparatively better during a recession because they are large enough to withstand the initial blow. Nevertheless, it is vital to bear in mind that the performance of different market capitalization segments may differ due to a variety of factors, and past performance is not necessarily indicative of future outcomes. Here are some observations, though:

  • Small-Cap Companies: Small-cap companies, which I would characterize as those companies with a market cap under $2 billion, tend to be more agile and can more quickly adjust to changing economic conditions. During the early stages of a recovery, small-cap companies could profit from a rise in consumer expenditure and business activity, as well as potential expansions. However, they could also be more exposed to risks and may have difficulties in acquiring capital and liquidating markets during a recession.
  • Mid-Cap Companies: Mid-cap companies, or those with a market cap between $2 billion and $10 billion, may do well on the way out of a recession and into a recovery as they are typically well-established companies with expansion potential. They may have better access to resources and capital than small-cap companies, which could be useful for getting through a recession. Nonetheless, mid-cap companies may also suffer during economic downturns, as they may be more susceptible to market volatility and could struggle to get capital contrasted with bigger companies.
  • Large-Cap Companies: Large-cap companies, or companies with market capitalizations of more than $10 billion, are generally more stable and well-established. During a recession, large-cap companies may benefit from their size and scope, as they can have greater access to capital, established clientele, and global operations that provide diversification. Moreover, large-cap companies may have more resources to cope with economic issues, such as cost-cutting measures, operational efficiencies, and the capacity to adjust to shifting market conditions. Nonetheless, they could also face risks such as slower growth rates, intensified competition, and potential regulatory scrutiny.

It is essential to keep in mind that the performance of small-cap, mid-cap and large-cap companies may vary significantly, depending on factors such as industry, sector, geographic location, and other company-specific elements. Therefore, it is critical to research and analyze thoroughly, including taking into account factors such as fiscal health, market conditions and long-term growth prospects, before making any investment decisions. Diversifying across different market capitalization segments and other asset classes can also be an effective risk management strategy during uncertain times. Consulting with a qualified financial professional for personalized investment advice is always recommended.


To learn more about this panel and their insights, watch the video recording of the economic outlook discussion or read about the insights from their discussion.

To learn how businesses should prepare for a recession, read this article from GHJ’s Growth Planning and Strategic Advisory Practice.

To learn to how businesses are better prepared for an economic slowdown in a post-COVID world, listen to this episode of the Business Disruption and Resilience Podcast.

If you have any questions or want to discuss how your business can prepare for economic uncertainty, please contact the experts at GHJ.

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David Sutton

David Sutton is GHJ’s Private Equity Practice Leader and serves clients across the U.S. that range from small family offices to established multi-disciplinary funds. He has more than 15 years of experience across finance, restructuring, and mergers and acquisitions. David’s deal experience includes…Learn More

Emily Sitting WEBSITE

Emily Meiselas

Emily Meiselas, CFE, has over 10 years of auditing experience within the entertainment industry. Her specialty includes contractual analysis with a focus on performing profit participation audits on behalf of talent, investors and co-producers at both the major and mini studios. Emily is the senior…Learn More