Three recession-proof industries

Economies typically take many years to recover fully from severe financial crises like the one in 2008. Welcome to the lost decade.

Still, a few sectors keep growing through ugly times, because they sell something people just can’t live (or die) without. Here are three shelters from the economic storm, and what organizations in those sectors will be buying in 2012:

Health care: “Demand for core health care isn’t discretionary,” says Brian Beaulieu, CEO of the Institute for Trend Research in Concord, N.H. Hospitals’ focus on core services makes them highly stable. And they’re huge spenders—in Canada, to the tune of $30 billion for supplies and services in 2011, estimates the Canadian Institute for Health Information.

Among OECD nations, Canadian hospitals have one of the highest error rates—a huge malpractice and reputation risk. “Hospitals are spending a lot of time and energy trying to figure out enterprise risk management,” says Mark Walton, health lead at KPMG in Toronto. They need suppliers of software to track risk factors and consulting advice on how to reduce risk.

In the private sector, the new players pouring into home care for seniors need to differentiate themselves. This offers marketing agencies a chance to help build home-care brands that are trusted by boomers and their parents.

Funeral services: “This is the classic example of a stable sector,” says Beaulieu. “The death rate [isn’t influenced by] bad times; people still need funerals.”

However, the death rate is rising as the population ages. So, funeral homes are hiring contractors to increase their capacity and decorators to create a look that appeals to boomers who are arranging their parents’ funerals, says Edward Horton, an industry analyst at consultancy Citrin Cooperman in Springfield, N.J.

Also rising is the popularity of cremations, which now make up half the market. Cremations yield less profit, notes Horton, which is driving demand for specialists who can help funeral homes cut costs without cutting quality.

Fast food: “Although consumers shift, to a degree, to cheaper foods during bad times, total consumption keeps growing with the population,” says Michael Burt, associate director of industrial economic trends at the Conference Board of Canada in Ottawa. In 2010, Canadian fast-food sales totalled $20.4 billion.

“App developers can offer restaurants new ways to put people in seats and increase per-visit purchases,” says Erik Thoresen, director of research for foodservice consultancy Tech­no­mic Inc. in Chicago. Technomic is forecasting strong growth in 2012 for location-based apps and direct-to-smartphone coupons.

Shawn Saraga, president of consultancy Mr. Franchise Inc. in Vaughan, Ont., says landlords often have the upper hand when renewing leases with fast-food franchisees, because the latter have already invested in the space. Franchisees need help from lease coaches to get better terms.