Cyclical Industry

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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 ?
These are ideal for cyclical industries, and offer great convenience.
Given copper's numerous applications in cyclical industries, the lower price of copper is viewed as an indicator of global economic weakness.
The company's exposure to the cyclical industries, such as memory chips, handsets and display panels, is a weakness compared with the higher-rated Microsoft Corporation (AA+/Stable), which has higher visibility of margin underpinned by a high recurring-revenue base.
Like many cyclical industries, mining is reviving, driven by steady global economic growth and an increasing demand for materials to support new technologies like electric vehicles, renewable energy and mobile devices.
This in turn could result in higher asset risks for banks in the longer term, especially for cyclical industries with relatively high financial leverage and problem-loan formation, such as the construction and commerce sectors.
Value stocks, often stocks of cyclical industries, may do well early in an economic recovery but are typically more likely to lag in a sustained bull market."
The Dow inched down 0.1 percent and the S&P 500 ended flat overnight after rising strongly for two days as advancing utilities offset declines in materials, banks and other cyclical industries.
Any new plant would take two to three years to complete and by then demand could improve, given the nature of such cyclical industries, he said.
The restricting will allow it to function more effectively in cyclical industries, where demand for products, projects and services differ over time.
CYCLICAL industries are always predictable in that they are up until they are down.
In cyclical industries with a history of frequent layoffs, such as some construction businesses, Oregon's rate can be as high as 5.4 percent.
If an industry enters a downswing, as happens in cyclical industries and during economic crises, there may not be any earnings to distribute, leading to dividend cuts or suspensions.