Processed food sales are presumably less affected by an economic slowdown than is
of the economy because food is a noncyclical commodity. But how well does the U.S.
manufacturing sector do during economic stagnation? How vulnerable are profits during
a time of
economic slowdown? These questions are important because the food manufacturing industries,
despite slow volume growth, were profitable during the prosperous 1980s, both in
profit levels and returns on stockholders’ equity, assets, and sales. The year
1991 is an excellent
period to measure this profit performance in a recession because the recession was
in effect the
entire year. This research examines two basic questions: (1) how did food processors’
compare to other industries in 1991, and (2) how did food processing profitability
to the 1987-1990 period--a time of economic growth?