8 Business Types That Are Thriving During the Pandemic
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The coronavirus pandemic has not impacted all of us equally. Certain communities, populations, and even industries were hit harder than others when the pandemic reached the United States and forced society to pause, contract, or shut down entirely.
While restaurants, bars, educational services, theaters, and many other small businesses that depend on foot traffic and in-person interactions suffered, other types of businesses have actually thrived. Businesses in these industries are either recession-proof—and even pandemic-proof—ventures, or have been able to pivot their operations successfully to account for shifting customer demand.
You’ve no doubt heard the occasional pandemic success story—the liquor delivery business that saw orders skyrocket during lockdowns, the clothing retailer that started producing popular face coverings, and so on. But on the whole, which industries have actually thrived during this uncertain and difficult time? Which businesses are a good bet to continue staying profitable going forward?
Using a combination of U.S. Census survey data and unemployment numbers, we’ve put together a ranking of the industries that have done the best during the height of the pandemic so far in 2020.
The top 8 businesses by pandemic performance
Which businesses are doing the best during the pandemic? Businesses in these eight industries appear to be performing well, according to unemployment levels as well as the results of recent weekly surveys from the U.S. Census Bureau. Industries were broken down by two-digit NAICS sector codes.
The utilities industry hasn’t missed a beat during the pandemic, and for good reason: These are truly essential services that people need to pay for, no matter the situation.
This sector includes businesses that provide services like electric power, natural gas, water, and sewage removal. It can include generation, transmission, treatment, and distribution of these services.
The unemployment level during the month of August in this industry was the lowest we reviewed, at just 2.2%. Compare that to the Arts, Entertainment, and Recreation, which saw over 26% unemployment.
In its responses to the U.S. Census Bureau, utilities companies mostly reported little impact from the pandemic: 46.8% of respondents said the pandemic had little to no, or even positive, impact on their business, by far the highest mark of any industry measured. Nearly 90% reported no disruption in operations for even a day, and 40.9% said they had at least three months of cash on hand, also outpacing all other industries.
2. Management of companies and enterprises
When your business is to hold the securities of, or other equity interests in, other companies and enterprises, it’s hard to have a down year. Even when that year is 2020.
Establishments in this sector can administer, oversee, and manage other businesses, including organizational planning and decision making—such as investment firms.
A sizable 38.6% of these businesses reported that they had at least three months of cash on hand, and 27.6% said they had generated over $500,000 in revenue in the last month—by far the highest percentage of any industry. On top of that, 18.1% reported an increase in revenue over the month prior, as well as increases in the number of employees and the number of hours they worked.
3. (tie) Administrative and support and waste management and remediation services
This is another industry that is intimately tied to the operations and success of other businesses. And despite the down year that the economy has had, businesses that provide administrative, support, waste management, and remediation services continued to thrive.
Businesses in this industry might perform duties such as office administration, hiring and placing of personnel, document preparation, solicitation, collection, security and surveillance services, cleaning, and waste disposal.
Of respondents to the U.S. Census Bureau in this industry, 13.6% said they saw an increase in revenue in the last week. Another 10.2% reported hiring more employees, and 12.2% said their employees were working more hours.
On top of this, 87.4% of these businesses said they had missed no payments or bills since March 13, 2020—a sign of steadiness despite big-picture upheaval.
3. (tie) Construction
Tied for third in this ranking is the construction industry, which of course encompasses businesses that construct buildings or projects and can include general contractors.
This industry is an interesting case. Unemployment in August was relatively high, compared to some of the other top industries, at 12.4%. But construction projects have mostly continued in many parts of the country throughout the pandemic, which is perhaps why 18.3% of construction businesses said the pandemic had no impact or a positive impact on them—the fourth-highest percentage of all businesses measured.
Construction businesses have also reported a relatively high rate of increase in both the number of employees working and the hours they worked. Clearly, projects are continuing apace for this industry, despite the recession.
5. Finance and insurance
Businesses involved in financial transactions and underwriting risk make up the finance and insurance industry.
This industry was barely disrupted due to the pandemic—86.9% of businesses said they did not have to close their offices, even for a day. As a result, unemployment in this sector is quite low, at just 3.1% as of August.
These businesses also have quite a bit of money in the bank, as 39.2% said they had at least three months of cash on hand for business operations. Finance and insurance businesses may not exactly be thriving as much as they are—relatively—unaffected by the events of 2020.
The manufacturing industry is made up of plants, mills, and factories, but also places that make general public products and sell them on-site, such as bakeries and custom tailors.
Many manufacturing businesses continued to pull in a lot of revenue during the pandemic: 13.2% said they made over $500,000 in revenue/total sales last month, the second-most on this list. A nearly identical amount—13.1%—saw an increase in revenue during that time as well. Employees and the hours they worked increased, too.
7. Professional, scientific, and technical services
This wide-ranging field includes many different kinds of businesses, such as legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design; computer services; consulting; advertising; photographic services; translation and interpretation services; veterinary services; and more.
With so many different kinds of businesses in this field, responses ranged from quite positive to moderately negative to some U.S. Census Bureau questions. That being said, unemployment was a relatively low 5.8%, and many businesses reported little-to-no impact, or even positive impact, from the pandemic.
In all, 30.6% of these businesses reported having more than three months worth of cash on hand—a comfortable number.
8. Retail trade
The retail trade encompasses more than just the local gift shop or national brand clothing stores. This industry includes “store retailers” that sell office supplies, electronics, automobiles, and the like; as well as “non-store retailers” that sell through vending machines, catalogs, and other direct methods.
Retail has had an up-and-down year, but on the whole, the sector is performing well: One quarter of all stores reported seeing an uptick in sales over the past week, the top-performing industry of all the ones measured. Retail businesses also reported hiring more employees and having them work more hours than usual of late.
Where this industry falters is in the supply chain: 57.1% of retail trade businesses reported supply chain disruption in the last week. Those that have been able to overcome these difficulties are being rewarded with rising revenues.
How we ranked these businesses
Data on how these businesses have been performing through the pandemic comes from two main sources: The U.S. Census Bureau’s Small Business Pulse Survey (SBPS), and the U.S. Bureau of Labor Statistics’ unemployment rates for the month of August 2020.
In the SBPS, the Census Bureau sought and provided “detailed information about small business operations and finances, requests and receipt of assistance, and two subjective measures, one of overall well-being and one of expectations for recovery.”
We pulled the questions and responses from this survey that we felt spoke the most to whether a business was performing well despite the pandemic over an eight-week period, from April 26 to June 27, 2020. Industries where the largest percentage of respondents selected the top-rated response were considered to be performing better than industries where smaller percentages chose the same. We then ranked each industry by what percentage of respondents selected the top-ranking response, and averaged their rankings across each question and answer.
The questions we focused on and their top-rated responses were:
Question: How would you describe the current availability of cash on hand for this business, including any financial assistance or loans?
Top-ranked response: 3 or more months of business operations
Question: In the last month, what were the total operating revenues/sales/receipts for this business, not including any financial assistance or loans?
Top-ranked response: $500k or more
Question: In the last week, did this business experience a change in operating revenues/sales/receipts, not including any financial assistance or loans?
Top-ranked response: Yes, increased
Question: In the last week, did this business have a change in the number of paid employees?
Top-ranked response: Yes, increased
Question: In the last week, did this business have a change in the total number of hours worked by paid employees?
Top-ranked response: Yes, increased
Question: In the last week, did this business have disruptions in its supply chain?
Top-ranked response: No
Question: In the last week, did this business temporarily close any of its locations for at least one day?
Top-ranked response: No
Question: In your opinion, how much time do you think will pass before this business returns to its normal level of operations relative to one year ago?
Top-ranked response: Little or no effect on this business's normal level of operations relative to one year ago
Question: Overall, how has this business been affected by the COVID-19 pandemic?
Top-ranked response: Large positive effect, moderate positive effect, or little to no effect
In addition, we included unemployment rates for each of these industries, per the numbers reported by the BLS for the month of August. Industries with the lowest unemployment rates were assessed to be thriving as compared to industries with high unemployment rates. The ranking of best to worst was also included in final scoring.
The full list of industries by pandemic performance
Management of companies and enterprises
(tie) Administrative and support and waste management and remediation services
Finance and insurance
Professional, scientific, and technical services
(tie) Real estate rental and leasing
Transportation and warehousing
Health care and social assistance
Arts, entertainment, and recreation
Accommodation and food services
Other services (except public administration)
This article originally appeared on JustBusiness, a subsidiary of NerdWallet. Christina Uglietta contributed to the data collection and analysis for this report.