Cyclical Industry

(redirected from Cyclical Industries)

Cyclical Industry

An industry that tends to do poorly when most of the economy as a whole is performing poorly, and well when the economy is doing well. Cyclical industries may represent publicly-traded companies that are perceived to sell luxuries or products. For example, car companies sell expensive products (cars) that many people perceive to be necessities. However, because cars are expensive, consumers in bad economic times may decide to wait to buy cars until the economy improves. On the other hand, car companies tend to do rather well when the economy is doing well.
References in periodicals archive ?
However, Casey says this constraint has loosened somewhat in the past 30 days, because of the perception among investors that cyclical industries are now in favor and that the recent economic slowdown has bottomed out and is improving.
During that time, the influx of midsize customers traditionally came from the construction and manufacturing sectors--two of the most cyclical industries.
Companies in highly cyclical industries also may opt to use non-financial measures to avoid variances that can occur in traditional financial and accounting measures.
This forecast is more favorable for the earnings of growth stocks than for the earnings recovery of basic cyclical industries," Lewis said.
Furthermore, only about 35% of CSX's revenue base is tied to highly cyclical industries like automotive, chemicals, metals and forest products.
Primary credit concerns relate to the company's significant capital expenditure program related to the construction or procurement of new generation, as well as a heavy industrial load in cyclical industries.
Primary credit concerns are OPC's large industrial load in cyclical industries and the commencement of retail access in 2001.
However, for the time being, homebuilders may continue to pay a penalty in capital markets, particularly as reflected in equity multiples, compared with similarly rated companies in other cyclical industries.