Secure your career: Experts reveal the industries and states at risk of recession
- Meghan Blumsum
- Sep 4, 2024
- 8 min read
Published by:
https://www.ucbjournal.com/tennessee-ranks-second-in-most-at-risk-of-suffering-from-a-job-recession/
78% of American citizens live in fear of losing their job, as it was revealed that 87% of businesses are likely to lay off staff if a recession happens. With this, many industries could be at risk, but which are the most vulnerable?
Interested to find out more, JobLeads studied the job growth in each industry around key financial events over the past 16 years. They then ranked these industries by how vulnerable they are to a recession.
Jan Hendrik von Ahlen, spokesperson for JobLeads commented: “There is an incredible amount of discussion around the recession, especially in the US.
“Employment numbers have been decreasing immensely since before the pandemic impacting various industries and states across the nation. With a total of nearly 7.2 million citizens unemployed, it is clear that volatility is super high and many employers are cutting jobs despite career openings hitting 8.1 million in April, this has actually fallen by 35% from the peak in 2022.”
Top 10 industries most likely to be affected by a recession
Rank | Industry | Change in job growth before covid (%) | Change in job growth during covid (%) | Change in job growth before financial crash (%) | Change in job growth after financial crash (%) | Net job growth 2005-2023 (%) | Vulnerability likelihood score /10 |
1 | Construction | -3.60 | 1.50 | -13.96 | 9.18 | -0.53 | 7.99 |
2 | Real Estate and Rental and Leasing | -4.51 | 2.84 | -5.02 | 4.14 | -0.22 | 7.81 |
3 | Manufacturing | -3.39 | 2.72 | -6.27 | 5.91 | -0.23 | 7.68 |
4 | Transportation and Warehousing | -0.17 | -0.48 | -4.51 | 3.66 | -0.26 | 7.56 |
5 | Information | -3.89 | 3.26 | -0.03 | 1.05 | -0.19 | 7.43 |
6 | Finance and Insurance | 0.64 | -0.76 | -4.92 | 4.00 | -0.19 | 7.24 |
7 | Total Private | -4.00 | 3.31 | -3.93 | 3.65 | -0.13 | 7.17 |
8 | Mining, Quarrying, and Oil and Gas Extraction | -14.35 | 15.95 | -5.02 | 1.20 | 0.55 | 7.17 |
9 | Wholesale Trade | -2.66 | 3.13 | -3.27 | 2.71 | -0.15 | 7.17 |
10 | Professional, Scientific, and Technical Services | -1.73 | 1.41 | -3.09 | 1.33 | -0.05 | 7.04 |
Ranking as the industry most at risk of suffering a recession is construction with an overall vulnerability score of 7.99 out of 10. With the previous financial crash caused by a housing bubble, mortgage payments lowered and there was a smaller demand for houses to be built causing the economy to fall leading to a downturn in the industry.
Construction workers may have found themselves looking elsewhere to use their tools after there was a near 14% decrease in job growth pre-financial crash in 2008, the highest of all 10 industries, and just a 9% increase post-crash.
Real estate placed as the second industry at high risk of a recession with a total score of 7.81 out of 10. This score is influenced by a sudden drop in the homebuying demand that comes from a spike in mortgage rates and unemployment.
Despite the real estate market generating the highest value in the US, and experiencing a surge in demand for homes, there has only been a 4% increase in job growth post-financial crash from 2008.
In third place, with a vulnerability score of 7.68 out of 10 is the manufacturing industry. With fewer people buying goods during a recession, the economy takes a hit, putting this industry massively at risk of a financial crisis.
Whilst the manufacturing sector could create around 3.8 million new jobs between this year and 2033, there has only been a near 6% increase in employment since the financial crash in 2008.
Transportation and warehousing is the fourth industry at risk of the effects of a recession, scoring 7.56 out of 10.
An estimated 16 million employees worked in this sector in 2023, a 1.7% increase from 2022 but since the financial crash in 2008, there has been a 3.66% growth in job employment.
In fifth, with a vulnerability score of 7.43 out of 10 is the information industry.
Whilst the Information sector is constantly evolving, and there has been a recent boom in AI use, there has been an employment increase of 3.26% since 2019, this comes after a job loss of 3.89% pre-pandemic.
Top 5 industries least likely to be affected by a recession
Rank | Industry | Change in job growth before covid (%) | Change in job growth during covid (%) | Change in job growth before financial crash (%) | Change in job growth financial after crash (%) | Net job growth 2005-2023 (%) | Vulnerability likelihood score /10 |
1 | Utilities | -1.04 | 3.54 | 3.22 | -2.89 | -0.07 | 6.09 |
2 | Agriculture, Forestry, Fishing and Hunting | 0.51 | -1.13 | -0.91 | 3.25 | -0.05 | 6.32 |
3 | Management of Companies and Enterprises | -2.91 | 3.97 | -2.30 | 1.22 | -0.05 | 6.47 |
4 | Retail Trade | -1.18 | 1.45 | -2.68 | 3.26 | -0.09 | 6.62 |
5 | Educational Services | -5.42 | 5.80 | -0.84 | -0.98 | 0.11 | 6.69 |
The industry least at risk of suffering from a recession is the Utility sector, with the lowest score of 6.09 out of 10. Agriculture, forestry, fishing, and hunting is the second industry safest from an American recession hosting a total vulnerability score of 6.32 out of 10. In third place, management of companies scored a close 6.47 out of 10.
Despite the possibilities of a recession, agriculture, utilities, retail, and education are all industry sectors that will remain playing a key role in the upkeep of society, therefore, making them least at risk of suffering from a future recession in the US.
Top 10 states most likely to be affected by a recession
Rank | State | Change in job growth before covid (%) | Change in job growth during covid (%) | Change in job growth before financial crash (%) | Change in job growth after financial crash (%) | Net job growth 2005-2023 (%) | Vulnerability likelihood score /10 |
1 | Arizona | -2.29 | 3.04 | -10.10 | 5.35 | -0.17 | 7.8 |
2 | Tennessee | -2.87 | 4.04 | -4.83 | 4.74 | -0.20 | 7.72 |
3 | Florida | -3.74 | 5.89 | -8.22 | 6.81 | -0.30 | 7.64 |
4 | North Carolina | -2.82 | 4.27 | -4.76 | 3.21 | -0.15 | 7.64 |
5 | Georgia | -3.83 | 5.43 | -5.03 | 4.59 | -0.16 | 7.62 |
6 | New Mexico | -5.02 | 8.38 | -4.15 | 1.73 | -0.08 | 7.59 |
7 | Washington | -4.03 | 5.40 | -3.81 | 2.46 | -0.10 | 7.57 |
8 | Arkansas | -2.09 | 4.03 | -2.70 | 2.15 | -0.16 | 7.54 |
9 | Delaware | -4.66 | 6.32 | -3.43 | 3.50 | -0.17 | 7.54 |
10 | Idaho | -0.06 | -1.41 | -8.91 | 4.54 | -0.14 | 7.54 |
Ranking as the state most at risk of suffering a recession is Arizona, with a total vulnerability score of 7.8 out of 10. Whilst the housing market remains stressed from rising prices and there have been signs of slowed GDP growth, this score has benchmarked the state as needing the most help.
This state is seen as vulnerable due to the lack of job growth pre-financial crash in 2008 as it is the highest of all 10 states at a whopping 10.10% decrease. Despite the growth since being positive, Arizona is deemed more vulnerable to going into a recession based on this past event.
In second place with a vulnerable score of 7.72 out of 10 is Tennessee. Influencing this final score is the average annual employment growth of just 1.2% over the past five years and with 40 at-risk counties, it is clear this economy is slowing and showing up to be weaker than in previous years.
With businesses in this state employed a total of 3.2 million people in 2024 already, there has been a 4.74% increase in the employment rate post-financial crash in 2008.
In joint third is Florida and North Carolina with a total score of 7.64 out of 10. With Florida hosting America’s lowest unemployment rates of all time, its third place comes from a risk of oversaturation, which in turn creates a higher chance of falling into a recession. North Carolina, on the other hand, had a consumer spending pullback and real estate re-financing difficulties leaving the chances of a recession at a moderate level.
Florida had a decrease of 8.22% pre-financial crash but now offers the highest job growth post-crash at 6.81%, whilst North Carolina suffered by nearly half at a decrease of 4.76% before the crash in 2008.
Top 5 states least likely to be affected by a recession
Rank | State | Change in job growth before covid (%) | Change in job growth during covid (%) | Change in job growth before financial crash (%) | Change in job growth financial after crash (%) | Net job growth 2005-2023 (%) | Vulnerability likelihood score /10 |
1 | North Dakota | -3.26 | 8.81 | -1.48 | 3.86 | 0.22 | 4.34 |
2 | Alaska | -2.18 | 5.90 | -2.09 | 1.59 | 0.04 | 5.87 |
3 | Texas | -3.11 | 6.29 | -2.38 | 1.98 | -0.05 | 6.29 |
4 | Louisiana | -2.86 | 5.99 | 2.25 | 0.83 | -0.07 | 6.36 |
5 | Illinois | -4.03 | 10.27 | -3.23 | 2.90 | -0.07 | 6.42 |
The state least at risk of suffering from a recession is North Dakota, with a low score of 4.34 out of 10. Alaska is the second safest state from an American recession hosting a total vulnerability score of 5.87 out of 10. In third place, Texas scored 6.29 out of 10.
Not only did the majority of these five states recover from the 2008 financial crash, but they also had an impressive change in job growth after the COVID-19 international crisis. With all recovering exceptionally fast resulting in a huge wave of increased employment ranging from nearly 6% to just over 10% on average, it is clear why these states are ranked as being least at risk of a recession and have a higher success securing jobs for Americans.
Three tips to guarantee a successful interview:
Being laid off is never an easy reality to come to terms with, so Jan Hendrik von Ahlen at JobLeads offered expert career tips on what to say in your next interview:
Sharing how you learnt from the experience
Whilst you may not see it at the time of losing your job, stressful situations like layoffs are a significant opportunity to show what you are truly capable of when life gets tough.
Potential employers would rather hear how an awful situation was turned around into a learning opportunity than listen to you recall the months spent on the sofa and cursing your former employer. Focusing on what you have learnt, and how to apply this to your next employer demonstrates resilience, adaptability, and readiness for new challenges. It also signals that you are ready for new opportunities with a fresh, positive, and inquiring mindset.
Be clear with what you want in a new role
Being laid off can actually lead you to rethink your career path and direction with what you truly want to gain from a job. This isn’t a bad thing, it can help you explain to employers what inspired you to apply to that particular role.
Whilst having the right experience and qualifications is key to securing a job, holding a positive attitude and fitting into the culture is a huge part of any hiring decision. Being able to articulate what you are looking for and why this particular organization is attractive, will make you stand out from other candidates on the interview shortlist.
Being honest about the layoff
Honesty is the best policy, that goes without saying in any job role. When sharing the reasons behind being laid off to potential employers, approach it neutrally and constructively.
Acting anxious, embarrassed, or angry about the matter can make the recruiter become suspicious and think it might not be so much a layoff as a you off. Whereas, using a straightforward approach indicates transparency and no hard feelings while demonstrating your understanding of the wider business context.
Methodology:
JobLeads want to find out the states and industries most at risk of suffering from a recession.
To do so, data from US Bureau of Labour Statistics was used to find the industries and states that would fare best in a recession based on past data on job growth as a % of employment.
The values for each year from 2005-2023 were averaged and then grouped by industry and state.
Data on how well each industry/state recovered from the COVID 19 pandemic and the 2008 Financial Crisis was found by averaging job growth in the years immediately prior, during and after the event.
This was combined with a linear regression on the job growth values from 2005-2023 to find a gradient of the line of best fit (the overall trend).
Finally an average percentrank was calculated to find a score representing how vulnerable each industry/state is likely to be in another recession.
The data used was the most up-to-date data available.
All data was collected and is accurate as of August 2024.
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