What is a cyclical business cycle?

When the economy is growing or expanding, these companies grow, and when the economy is in a recession or depression, they decline. An industry classified as cyclical is sensitive to the business cycle, which results in higher revenues during periods of economic expansion, but lower revenues during periods of economic contraction and downturn.

What is a cyclic industry?

What is a Cyclical Industry? Cyclical industry refers to an industry whose performance patterns are strongly correlated and affected by the business cycle. When the economy is growing or expanding, these companies grow, and when the economy is in a recession or depression, they decline.

How does a cyclical industry affect revenue?

Conversely, during periods of economic downturn and contraction, their revenues tend to decline. A cyclical industry, at its core, is intricately connected to the fluctuations of the business cycle, undergoing shifts in revenue based on the prevailing economic conditions.