1851

In 2022, data from Institute for Supply Management showed that spending on services was keeping the American economy afloat amid a slowdown in manufacturing activity,&nbsp;<a href="https://qz.com/the-service-economy-is-keeping-the-us-from-slipping-int-1849502785?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-service-economy-is-helping-the-us-avoid-a-recession-2723234" target="_blank" rel="nofollow">Quartz</a> reported. The survey showed that the services sector continued to boom as companies benefited from a drop in inflation and more reliable supply chains, with executives across a variety of industries reporting business was growing.&nbsp;Franchises in the services industry have been seeing growth since the start of the pandemic, with the home services segment reaching a&nbsp;<a href="https://www.angi.com/research/wp-content/uploads/sites/2/2020/04/DP5900-Print-HomeServiceMarket-Report_FINAL2-Compressed-1.pdf?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-service-economy-is-helping-the-us-avoid-a-recession-2723234" target="_blank" rel="nofollow">value of $500 billion</a>. This increased spending from consumers benefited the economy as other major industries witnessed a slowdown.&nbsp;Being made up of a diverse range of industries, the services economy has proven its resilience in turbulent times, creating jobs, driving innovation and providing a buffer against economic downturns. With that said, here’s a look into why the service economy is helping the United States avoid a recession.&nbsp;<h3>Diversification and Stability</h3>One of the service industry’s biggest strengths is its ability to diversify the economic landscape. Covering a wide range of industries such as home services, health care, education and financial services, there is less reliance on any one sector. This mitigates the impact of any losses. When other industries face challenges, the services sector can still thrive and provide stability to the overall economy.&nbsp;<h3>Resilience and Steady Demand</h3>The services sector often demonstrates resilience, remaining relatively unaffected by economic fluctuations. When consumer spending on discretionary goods might drop during a recession, the demand for essential services remains relatively constant. People still require medical attention, education and other critical services, which ensures that the services economy maintains a steady flow of revenue even in challenging times.During the COVID-19 pandemic, the&nbsp;<a href="https://1851franchise.com/lawndoctor/why-the-home-services-industry-is-so-hot-right-now-2720180#stories">home services segment</a> saw a boom in demand as people spent more time at home. In fact, consumer spending in the home services category started growing faster than pre-pandemic levels by the end of 2020, according to a report from&nbsp;<a href="https://www.businesswire.com/news/home/20210426005061/en/Home-Service-Category-Shows-Strong-Growth-As-U.S.-Economy-Steadily-Reopens?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-service-economy-is-helping-the-us-avoid-a-recession-2723234" target="_blank" rel="nofollow">Jobber</a>.<h3>Job Creation</h3>The services sector is a labor-intensive industry and offers employment opportunities to millions of Americans. The&nbsp;<a href="https://www.bls.gov/spotlight/2023/a-look-at-projected-employment-in-professional-scientific-and-technical-services-2021-31/home.htm?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-service-economy-is-helping-the-us-avoid-a-recession-2723234#:~:text=The%20professional%20and%20business%20services,total%20wage%20and%20salary%20employment." target="_blank" rel="nofollow">professional and business services sector</a> alone is projected to grow 7.3% over the 2021 to 2031 decade, which is faster than the 5.5% growth projected for total wage and salary employment.&nbsp;As services continue to be in demand, businesses must hire and retain employees to meet customer needs. This constant job creation and stability provide a buffer to the labor market during times of economic uncertainty. Sustaining these jobs also helps to support household incomes and maintain consumer spending.<h3>How Service Franchises Are Boosting the Economy</h3>Service franchises form an integral part of the economy and contribute significantly to the United States' ability to avoid a recession. Through job creation, economic impact, resilience and innovation, service franchises play a crucial role in stabilizing the economy during times of turbulence. Additionally, their local and national presence fosters community ties and drives economic growth.&nbsp;

How the Service Economy Is Helping the U.S. Avoid a Recession

1851 Franchise

The services industry is made up of a wide range of industries that have proven their economic resilience over the past several years.

how-the-service-economy-is-helping-the-us-avoid-a-recession

BooXkeeping

BooXkeeping Closes Out a Breakout 2025 With Major Wins and Momentum for 2026

booxkeeping-2025-growth-franchise-expansion-2026-momentum

Benjamin Franklin Plumbing

Benjamin Franklin Plumbing Franchise - Eli and Abby Power - 1851 Franchise

Eli and Abby Power Turned a Rural Plumbing Shop Into a Multi-Generational Benjamin Franklin Plumbing Franchise

benjamin-frankling-plumbing-franchise-eli-abby-power-western-colorado

Image Studios

IMAGE Studios Celebrates Record Growth in 2025 With 35 Openings and 50 Units Awarded

image-studios-franchise-growth-2025

Dillas Quesadillas

Design with photo of Michael Mabry and Dillas Primo Quesadillas logo

Franchise Times: New Franchise Exec Says Dillas Is Bringing ‘Excitement’ Back to QSR Category

michael-mabry-franchise-growth

Lawn Squad

Greener, Faster, Smarter: Why Entrepreneurs Are Choosing Lawn Squad 

Greener, Faster, Smarter: Why Entrepreneurs Are Choosing Lawn Squad as a Treatment-Only Lawn Care Franchise

lawn-squad-franchise-opportunity

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Buying a fitness franchise, people exercising

Boutique vs. Big Box Gym Franchises: Which Offers Best ROI in the $7 Billion Fitness Market?

buy-fitness-franchise-boutique-big-box-comparison

Pieology Pizza Enters Chapter 11 Following Costly Bid To Save Struggling Stores

pieology-pizza-files-chapter-11-bankruptcy

CNBC: McDonald’s Will Assess if Franchisees Are Offering Value for Customers Under New Standards

mcdonalds-franchise-standards-value-metric

How AI Is Transforming Restaurant Operations and Franchises

ai-impact-restaurants-franchises-human-centric-technology

Round Table Pizza Franchisees Take FAT Brands to Court Over Marketing Fund Mismanagement

round-table-pizza-franchisees-take-fat-brands-to-court-over-marketing-fund-mismanagement

AI-related job cuts, October U.S. job cuts, American job cut record

AI-Fueled Layoffs Reshape the U.S. Job Market — And Highlight Franchising’s Resilience

ai-job-cuts-franchising-path-forward

Paris Baguette Welcomes Zac Sulma as New Chief Operating Officer

new-coo-zac-sulma

Callaway Sells Majority Stake in Topgolf to Private Equity for $770 Million

callaway-sells-majority-stake-in-topgolf-to-private-equity-for-770-million

A Practical Playbook: Who To Call First When Franchising Your Business

franchising-your-business-who-to-call-first

Photo of group of dogs standing together in day care facility

Top Pet Boarding and Day Care Franchise Opportunities for 2025

top-pet-boarding-daycare-franchises

image of jerome hanway from right at home Las Cruces, New Mexico 1851 franchise franchisee spotlight

Jerome Hanway Is Building His Right at Home Franchise Around His Mission To Serve

right-at-home-franchise-las-cruces-jerome-hanway

1851 Franchisee Spotlight graphic with photo of Eli Cohen, Layne's Chicken Fingers logo

C5 Restaurants Grows its Texas Footprint with 40 Layne’s Chicken Fingers Locations Planned Statewide

eli-cohen-laynes-chicken-fingers-texas

How the Service Economy Is Helping the U.S. Avoid a Recession

MORE STORIES LIKE THIS