With research indicating a 35% likelihood of an American recession before 2025, it’s no surprise that searches for ‘US recession 2024’ have surged by 4,100% over the past year.
As concerns grow about a potential slowdown in the world’s largest economy, several industries could be at risk. But which sectors are the most vulnerable?
To explore this, JobLeads analyzed job growth across various industries as a percentage of employment, drawing on data from both the COVID-19 pandemic and the 2008 financial crisis, examining trends before, during, and after these events. An average percentile rank was calculated to determine which industries are most susceptible to a recession.
Key findings:
- Construction emerged as the industry most vulnerable to a recession, with a risk score of 7.99/10.
- Post-2008, construction saw a 9.8% job growth.
- The utility sector ranked as the least vulnerable, with a score of 6.09/10.
- Arts, entertainment, and recreation experienced the sharpest decline in job growth due to COVID-19, at -20.2%.
Jan Hendrik von Ahlen, spokesperson for JobLeads, commented: “There’s significant discussion surrounding a potential recession, particularly in the US.
“Employment figures have been steadily declining since before COVID-19, impacting numerous industries and states. This is exacerbated by the US Federal Reserve not cutting interest rates and higher-than-expected unemployment levels. With nearly 7.2 million Americans currently unemployed, the job market is extremely volatile, and although there were 8.1 million job openings in April, that number has dropped 35% from its peak in 2022.”
Construction ranks as the industry most vulnerable to a recession, with a vulnerability score of 7.99 out of 10. During the 2008 financial crisis, triggered by a housing bubble, mortgage payments fell, and demand for new homes dropped, causing a significant downturn in the construction sector. Prior to the crash, job growth in construction fell by nearly 14%, the steepest decline among the 10 industries analyzed, and saw only a modest 9% recovery afterward.
Real estate follows as the second most at-risk industry, with a score of 7.81 out of 10. This is driven by a sharp drop in homebuying demand due to rising mortgage rates and unemployment. Despite being one of the highest-value markets in the US, real estate saw only a 4% increase in job growth after the 2008 financial crash, even with recent surges in housing demand.
In third place, with a vulnerability score of 7.68 out of 10, is the manufacturing industry. A recession typically reduces consumer spending on goods, leaving this sector particularly exposed to economic downturns. While manufacturing may generate around 3.8 million new jobs by 2033, the sector has seen only a 6% employment increase since the 2008 crisis and a 2.72% rise post-COVID.
Transportation and warehousing, with a score of 7.56 out of 10, ranks fourth in vulnerability. The sector employed an estimated 16 million people in 2023, a 1.7% rise from 2022. However, job growth in the sector since the 2008 crash has been limited to 3.66%.
The information industry takes fifth place with a vulnerability score of 7.43 out of 10. Despite continuous advancements and the recent boom in AI, employment in the sector saw only a 3.26% increase post-COVID, following a 3.89% job loss prior to the pandemic.
The Utility sector is the least vulnerable to a recession, receiving the lowest vulnerability score of 6.09 out of 10. Following closely, the Agriculture, Forestry, Fishing, and Hunting sector ranks second with a score of 6.32 out of 10. In third place is the Management of Companies sector, scoring 6.47 out of 10.
Despite the looming possibility of a recession, sectors like agriculture, utilities, retail, and education are expected to continue playing crucial roles in society, making them less likely to suffer significantly during a future recession in the US.
Three Tips for a Successful Interview:
Facing a layoff can be challenging, but Jan Hendrik von Ahlen from JobLeads offers key advice for making a strong impression in your next interview:
- Highlight What You’ve Learned: Even though losing a job is tough, it can be an opportunity to showcase how you’ve grown from the experience. Employers prefer hearing how you transformed a difficult situation into a learning opportunity rather than dwelling on past frustrations. Emphasize your resilience, adaptability, and how you’re prepared for new challenges with a positive and proactive attitude.
- Be Clear About Your New Role Goals: A layoff might prompt you to reassess your career goals. Use this to your advantage by articulating what you’re seeking in a new role and why you’re interested in a particular position. While experience and qualifications are crucial, demonstrating a clear understanding of what you want and how you align with the company’s culture can set you apart from other candidates.
- Be Honest About the Layoff: Honesty is essential. When discussing your layoff, present the situation in a neutral and constructive manner. Avoid showing anxiety or anger, which might raise concerns for the recruiter. A straightforward approach indicates transparency and a mature understanding of the business context, which can positively influence your interview.
Methodology:
To assess the industries and states most at risk of a recession, JobLeads analyzed data from the US Bureau of Labor Statistics. They examined job growth percentages from 2005 to 2023, considering historical data from the COVID-19 pandemic and the 2008 Financial Crisis. The analysis included averaging job growth before, during, and after these events and applying linear regression to identify overall trends. An average percent rank was then calculated to determine the vulnerability score for each industry and state in the event of a future recession.
