It’s been a year now since the collapse of Lehman Brothers and the subsequent/concurrent fallout in real estate and consumer spending. Below is a list of the 20 industries that have been affected the greatest, for better and for worse.

• Oil drillers, food & medicine manufacturers, and trade schools were some of the best.
• Real estate, wood products and auto dealerships fared the worst.

Here is a brief list that was just compiled by the financial information company, Sageworks, outlining a handful of interesting recession-time behaviors, all of which are small indulgences that have seen growth in the last 12 months. People may not be spending on large luxuries like cars, jewelry and vacations but they are still keeping room in the budget for small luxuries like gym memberships and dining out.   

Sageworks compiled this list of 4 favorable changes in the business world over the last year, showing the upside of the down economy for businesses.  The data is elaborated on by Sageworks CEO, Brian Hamilton, on this Fox Business segment.

With all of the talk of large bankruptcy filings, Sageworks released a list of 10 types of private companies that are most likely to file for bankruptcy in the coming months. The list is based on the average debt-to-equity ratio in the industry over the last 12 months. A high debt-to-equity ratio generally means that a company has been aggressive in using debt to finance growth. 

Below is the 2008 Sageworks ranking of the most profitable industries in the United States.  Companies in these industries have the highest net profit margins of all privately held companies over the last 12 months.  You may notice that 9 of the 10 industries are service providers and 4 are in the healthcare field. 

Sageworks Inc. released data today looking at how privately held residential remodelers and finishing contractors such as painters and flooring businesses are faring this year.  While privately held residential construction companies have seen sales decline by an average of 5.35 % in 2008, sales are still growing for residential remodelers (5.31% in 2008) and finishing contractors (7.43% in 2008).  Could the fact that it’s a buyer’s market be driving homeowners to stay in their current homes and fix up instead of move out?  The data is displayed below.  

Building Finishing Contractors (NAICS 2383): The types of businesses in this industry include painting, flooring, tile, carpentry and insulation contractors.  Sales growth increased for the average finishing contractor from 6.16% in ‘07 to 7.43% in ‘08.  The industry is not recession proof; the amount of time it takes to collect payment has increased from 47.63 days in 2007 to 51.4 days in 2008.  Net profit margins have decreased on average from 5.31% in 2007 to 3.74% in 2008. 

 Residential Remodelers (NAICS 236118): Sales growth for the average residential remodeler is at an average of 5.31% in 2008, down from 8.24% last year.  Residential remodelers are also not recession proof; the amount of time it takes to collect payment has increased from 15.22 days in 2007 to 22.09 days in 2008.  Net profit margins have increased from 6.98% in 2007 to 7.78% in 2008. 

 Businesses providing “need-to-haves” are faring relatively well this year. 

Sageworks released data today looking at the top 30 industries over the past 12 months by sales growth.  The ranking is below along with an outline of the types of privately held businesses that are found in the list. 

Health Care: Of the 30 industries listed, four are related to healthcare.  Home health care services saw sales grow an average 14.49% during the past 12 months.  Medical and diagnostic laboratories saw an average 13.12% growth in sales during the same time period.  The medical equipment and supplies manufacturing industry also experienced sales growth, up an average 12.26 percent.  Outpatient care centers saw an average 11.08% growth in sales over the past 12 months.   These health care industries are still growing, especially as generations such as the baby boomers are getting older.

Petroleum, Coal & Mining: Petroleum Wholesalers (16.31%) and Petroleum & Coal Products Manufacturers (12.97%) are both on the best-performing industries list.  Also, businesses providing support activities for Mining (17.76%) and Metal and Mineral Wholesalers (10.18%) fell in the top 25 industries by sales growth over the last 12 months. 

Waste Services: Businesses providing necessary services have proven to be relatively recession-proof; this may be because many of these services are contracted by cities and towns across the nation.  Remediation and Other Waste Management Services saw average sales growth of 14.85% over the past 12 months and Waste Collection companies saw sales grow by an average of 13.34% in the same period.

Technology & Telecommunications: Software Providers (14.18%), Other Telecommunications businesses (providers of specialized telecommunications applications, such as satellite tracking – 13.49%), and companies providing Computer Systems Design Services (10.77%) all fell in the top 25 industries by sales growth over the past 12 months.  Technology is still moving forward even as the economy slows. 

Agriculture: Farm Product Raw Material Wholesalers (21,7%), Cattle Ranching & Farming (19.45%), and businesses providing Support Activities for Agriculture & Forestry (13.44%) all grew at a healthy rate this year.  This may be attributable to the fact that agriculture-related industries are providing many “need-to-haves”. Crops and commodities are essential as a source of food and raw materials, so as the economy weakens and consumers are more watchful for bargains or scaling back to only things they need, industries involving farming should be some of the last to be affected by the pained economy.

 Accounting: Accounting, Tax Preparation, Bookkeeping and Payroll Services businesses grew at an average of 11.87% over the last 12 months.  With all of the skepticism about the future of banks and businesses, it is no wonder that accounting firms are growing their revenues this year.  An accountant or CPA, who is often a business owner’s closest advisor, is likely to be utilized during the current time to discuss how to manage a business in a tough economy; business owners may seek as much advice as possible to ensure that the bottom line stays above water. 

Companies such as newspapers, news websites and social networking sites dependent on advertising dollars to make money may see a particular slow down as businesses cut unnecessary expenditures for fear of continued economic woes.  Sageworks Database of private company activity shows a downward trend in advertising dollars spent as a percent of sales from 2007 to 2008 for automobile dealers, restaurants and retail clothing stores.

In light of this trend Brian Hamilton, CEO of Sageworks, remarked, “when companies feel threatened in an uncertain economic environment, they tend to cut discretionary expenses, one of which is advertising.  Unfortunately, this tends to further depress sales and profits, since good advertising efforts drive profits and sales.”

The downward trend in advertising which is presumably due to tightened spending by businesses is similar to the downward trend being felt by retail stores due to tightened discretionary spending by consumers (see “Small and Large Retail Businesses Feel the Downturn“).

See also: http://www.adotas.com/2008/09/report-display-down-6-year-over-year/ - On online advertising trends in 2008.