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Some industries hold their own, even prosper, in bad times
Tuesday, March 17, 2009

While recessionary times have many executives fretting about next quarter's sales and whether they will have to shutter facilities or slash payrolls, George Pry is looking at growth figures.

Mr. Pry, president of the Art Institute of Pittsburgh, said enrollment in the school's online division is up 14 percent and he attributes the boom at least in part to people seeking new skills because they have been laid off or fear they will be soon.

While about 75 percent of students at AIP's Downtown campus arrive right out of high school, "People on the online side tend to be an older population who are working or trying to reinvent" themselves, Mr. Pry acknowledged.

Even with tuition rates that rival those charged by private colleges and present challenges for students who need student loans, schools such as the Art Institute are holding their own because many consumers view higher education as a critical investment for their future.

"It's one of the areas over the years that's viewed as somewhat counter-cyclical," said Harold Miller, a regional economist.

While Mr. Miller does not buy in to the notion that some industries are "recession-proof," there are some businesses, he said, for which people will spend money no matter what, making them more resistant when the economy spins into free fall.

Education is one of those, he said. "People who are laid off may decide to go back to school either out of necessity because their job doesn't exist anymore and they need new credentials, or because they always wanted to go back and get a master's and they didn't want to stop working. So when they're forced to stop working, they may do it."

Then there are sectors such as health care and utilities.

"People get sick and they may delay some discretionary [medical procedures] and more people may lose their insurance but, fundamentally, people still get health care. And people need electricity and gas," he said.

Some energy and construction sectors also hold up in an economic crisis, Mr. Miller said, especially businesses involved in big, long-term projects.

Locally that includes Westinghouse Electric, which has won major contracts to build nuclear power facilities in China, South Carolina, Georgia and Florida. The company is preparing to move later this year into new headquarters in Cranberry that could house as many as 3,500 workers by 2010.

"Westinghouse has not shut down the hiring it's doing. It has commitments, and long-term commitments are not as easily subject to termination. Somebody may decide not to build something small, but a nuclear plant is going to be around for decades," Mr. Miller said.

The economy's problems also have provided opportunities for some sectors, such as financial services, he said. "People say, 'I need someone to tell me what do because I've lost a lot of money or I need to figure out my strategy.' "

At Hefren-Tillotson, a Downtown-based financial planning and investment firm, four advisers come to the office on Sunday mornings to handle phone calls to the company's weekly radio show.

A year ago, the workload was handled by two advisers. And a recent retirement planning seminar drew 40 percent more attendees than a year ago.

"There are definitely more questions," said Kim Tillotson Fleming, president. "Though it's a really tough environment, we feel we have a lot to offer. People who are experiencing layoffs or early retirement need to sit down and do serious planning."

Hefren-Tillotson has 140 employees in five offices throughout the region and, despite the decline in the value of its customers' portfolios, the firm has been able to avoid layoffs, she said.

"I do feel that for firms focused on financial planning and advising individuals, there will always be a place," she said.

Another industry that may be benefiting from customers' financial woes is professional coaching.

"People who are laid off are wondering, 'What can I do?' and people nearing the end of their careers are wondering what to do. So my business isn't going down at all," said Donna Billings, a Wexford-based coach who specializes in advice for people in transition.

"There is always a need for coaches. When things get bad like this, people need somebody to lean on and be a champion for them."

Ms. Billings also teaches at Duquesne University and designed a new certification program in business and personal coaching that will launch in April at Duquesne's School of Leadership and Professional Advancement.

Demand has been strong from prospective students, she said.

"We're finding a lot of people who want to get out of the rat race and start their own practice as coaches."

A way to gauge whether an industry might survive a recession is if it helps people who are in trouble, such as agencies that assist consumers with credit repair or debt restructuring, said Tom Taulli, founder of BizEquity, a Spring House, Pa.-based firm that calculates business values.

While the giant domestic automakers are seeking billions in cash infusions to survive, many mom-and-pop auto repair shops appear to be humming along with steady business, he said.

"When a car reaches seven years or older, you have to start getting it fixed. And the average age of cars right now is the highest in decades because people are not buying new ones."

Joyce Gannon can be reached at jgannon@post-gazette.com or 412-263-1580.
First published on March 17, 2009 at 12:00 am