Inmacroeconomics,thesecondary sector of the economyis aneconomic sectorin thethree-sector theorythat describes the role ofmanufacturing.It encompassesindustriesthatproducea finished, usableproductor are involved inconstruction.
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This sector generally takes the output of theprimary sector(i.e.raw materialslike metals, wood) and createsfinished goodssuitable for sale to domesticbusinessesorconsumersand forexport(via distribution through thetertiary sector). Many of these industries consume large quantities of energy, requirefactoriesand use machinery; they are often classified aslightorheavybased on such quantities. This also produceswastematerials andwaste heatthat may cause environmental problems orpollution(seenegative externalities). Examples includetextile production,car manufacturing,andhandicraft.[1]
Manufacturing is an important activity in promotingeconomic growthanddevelopment.Nations that export manufactured products tend to generate higher marginalGDPgrowth, which supports higherincomesand therefore marginaltax revenueneeded to fund such government expenditures ashealth careandinfrastructure.Amongdeveloped countries,it is an important source of well-paying jobs for themiddle class(e.g., engineering) to facilitate greatersocial mobilityfor successive generations on the economy. Currently, an estimated 20% of thelabor forcein the United States is involved in the secondary industry.[2]
The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produceagriculturaland other raw materials (i.e.,primary sector) tend to grow slowly and remain eitherunder-developedordeveloping economies.The value added through the transformation of raw materials into finished goods reliably generates greaterprofitability,which underlies the faster growth ofdeveloped economies.
| Economy | Countries by Industrial Output (in PPP terms) at peak level as of 2020 (billions inUSD)
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(01) China
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(—) European Union
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(02) United States
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(03) India
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(04) Japan
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(05) Indonesia
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(06) Russia
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(07) Germany
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(08) South Korea
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(09) Saudi Arabia
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(10) Mexico
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(11) Turkey
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(12) Brazil
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(13) United Kingdom
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(14) France
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(15) Italy
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(16) Iran
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(17) Canada
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(18) Poland
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(19) Thailand
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(20) Egypt
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The twenty largest countries by industrial output (inPPPterms) at peak level as of 2020, according to theIMFandCIA World Factbook.[citation needed] | |||||||||
22nd
References
edit- ^"What is secondary sector? Definition and meaning - BusinessDictionary.com".Archived fromthe originalon 2020-08-05.Retrieved2020-07-14.
- ^"Secondary Industry: Meaning, Types, Characteristics, and Examples".
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