Veterinary Practices Brace for Recession: Are You Ready for the Coming Downturn?
Veterinary medicine in the United States may have long been considered “recession-resistant,” but new research suggests that the industry is far from immune to economic cycles. In a study titled Anticipating the Downturn: Business Cycle Forecasting for Veterinary Practice Strategy in the United States, researchers used advanced time-series econometrics to analyze veterinary-specific inflation and expenditure patterns, revealing a distinct business cycle for veterinary services that often lags behind the broader economy by years.
While pet care demand surged during the COVID-19 pandemic, creating the perception of immunity to economic downturns, the industry still experiences predictable periods of growth and contraction, influenced by factors such as consumer disposable income, pet adoption trends, and general macroeconomic conditions.
The researchers applied a dynamic ARIMA model to forecast the veterinary business cycle for the next 12 months, incorporating variables such as industrial production, consumer sentiment, and real disposable income. Their analysis shows that veterinary service inflation has remained high post-pandemic but is beginning to cool, while real expenditures, after peaking, have recently started to decline. The model predicts that the veterinary sector is currently in a recessionary phase, which began in late 2024 and may extend through much of 2025. However, there is a chance for a recovery in mid-2026 if external economic shocks are minimal.
Understanding these cycles is critical for practice owners. The study outlines four distinct phases—Recovery, Expansion, Contraction, and Recession—each with tailored management strategies. During recovery, practices can invest strategically in infrastructure, equipment, and staff training while exploring opportunistic acquisitions. Expansion is the time to capitalize on strong demand through workforce development, pricing strategy adjustments, and marketing campaigns that highlight differentiated services. Contraction requires vigilance: monitoring revenue metrics, preserving cash flow, renegotiating vendor contracts, and adjusting staffing or service offerings to maintain profitability. Finally, recession is a phase for strategic repositioning—focusing on operational efficiency, client retention, and planning for new services or market opportunities to emerge stronger in the next growth cycle.
The study emphasizes that while the veterinary industry is not perfectly insulated from macroeconomic shifts, aligning business decisions with the specific phase of the veterinary business cycle can help practices mitigate risks and seize opportunities. By proactively managing cash flow, investments, staffing, and client engagement, practices can not only survive but strategically prepare for the next expansion phase. This research provides a practical framework for veterinary leaders to anticipate economic challenges, make data-informed decisions, and ensure long-term resilience in an industry often thought to be recession-proof.
For the full research and access to detailed forecasts, visit Frontiers in Veterinary Science and explore the veterinary economic dashboard at https://www.frontiersin.org/journals/veterinary-science/articles/10.3389/fvets.2025.1689704/full
