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.