Things that keep me up at night as a software contractor/freelancer: if there's a recession, are contractors the first to go? One counter-argument is that contractors can be a cheaper way for companies to build products (since it's not full time), which might mean companies favor contractors. On the other hand, companies who are reluctant to lay off full-time staff may start by canceling contract relationships.
To what you said above, both can be true. But it depends on the client's business.
I got completely crushed last time. But my clients were primarily in travel and fashion/lifestyle which both got hit hard early. And I was trying to bootstrap a social media startup at the time, which was also in travel. So I got destroyed.
Typically agencies and freelancers are the first to feel a recession. Vendors are more expendable than W-2 employees so contracts get stalled out or cancelled as soon as the warning signs hit the board room.
However... I've known of some people who actually did quite well last time around. Generally they were offering lower rates than the competition and specialized in maintaining software that was essential to recession-proof businesses (like entertainment, education, government etc). They had long-term contracts where they were essential to these businesses, and they lowered their rates to be competitive. This was eventually how I recovered as well.
Basically my advice is - prepare to shift from quality to quantity for a bit, diversify your client portfolio and put effort into building long term clients where you're essential.