View source for Finance:Secondary sector of the economy

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{{Short description|Manufacturing and construction industries}}

In [[Finance:Macroeconomics|macroeconomics]], the '''secondary sector of the economy''' is an [[Finance:Economic sector|economic sector]] in the [[Finance:Three-sector model|three-sector theory]] that describes the role of manufacturing. It encompasses industries that [[Finance:Production (economics)|produce]] a finished, usable [[Finance:Product (business)|product]] or are involved in construction.

This sector generally takes the output of the [[Finance:Primary sector of the economy|primary sector]] (i.e. [[Chemistry:Raw material|raw material]]s like metals, wood) and creates [[Finance:Finished goods|finished goods]] suitable for sale to domestic businesses or consumers and for [[Finance:Export|export]] (via distribution through the [[Finance:Tertiary sector of the economy|tertiary sector]]). Many of these industries consume large quantities of energy, require [[History:Factory|factories]] and use machinery; they are often classified as light or heavy based on such quantities. This also produces waste materials and [[Astronomy:Waste heat|waste heat]] that may cause environmental problems or pollution (see [[Finance:Externality|negative externalities]]). Examples include textile production, {{wipe|Automotive industry}}, and handicraft.<ref>{{Cite web |url=http://www.businessdictionary.com/definition/secondary-sector.html |title=What is secondary sector? Definition and meaning - BusinessDictionary.com |access-date=2020-07-14 |archive-date=2020-08-05 |archive-url=https://web.archive.org/web/20200805141751/http://www.businessdictionary.com/definition/secondary-sector.html |url-status=dead }}</ref>

Manufacturing is an important activity in promoting [[Finance:Economic growth|economic growth]] and [[Finance:Economic development|development]]. Nations that export manufactured products tend to generate higher marginal [[Finance:Gross domestic product|GDP]] growth, which supports higher [[Finance:Income|income]]s and therefore marginal tax revenue needed to fund such government expenditures as [[Medicine:Health care|health care]] and [[Physics:Infrastructure|infrastructure]]. Among [[Finance:Developed country|developed countries]], it is an important source of well-paying jobs for the middle class (e.g., engineering) to facilitate greater [[Social:Social mobility|social mobility]] for successive generations on the economy. Currently, an estimated 20% of the labor force in the United States is involved in the secondary industry.<ref>{{Cite web |url=https://www.marketing91.com/?s=Secondary+Industry%3A+Meaning%2C+Types%2C+Characteristics%2C+and+Examples |title=Secondary Industry: Meaning, Types, Characteristics, and Examples}}</ref>

The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produce [[Earth:Agriculture|agricultural]] and other raw materials (i.e., primary sector) tend to grow slowly and remain either under-developed or developing economies. The value added through the transformation of raw materials into finished goods reliably generates greater profitability, which underlies the faster growth of developed economies.

{{Bar chart
| float       = center
| title       = 20 largest Countries by Industrial Output (in PPP terms) according to the [[Organization:International Monetary Fund|IMF]] and CIA World Factbook, at peak level as of 2020 {{Citation needed|date=May 2021}}
| table_width = 70
| bar_width   = 50 <!-- must be an unformatted number -->
| data_max    = 12,000<!-- Upper bound on the values in the data fields -->
| label_type  = Economy
| data_type   = {{center|Countries by Industrial Output (in PPP terms) at peak level as of 2020 (billions in {{wipe|United States dollar}})}}
| label1      = (01) '''{{CHN}}''' | data1 = 11,261<!-- Peak in 2020 -->
| label2      = (—) '''''{{EU}}''''' | data2 = 5,729<!-- Peak in 2019 -->
| label3      = (02) '''{{USA}}''' | data3 = 4,093<!-- Peak in 2019 -->
| label4      = (03) '''{{IND}}''' | data4 = 2,604<!-- Peak in 2020 -->
| label5      = (04) '''{{JPN}}''' | data5 = 1,719<!-- Peak in 2019 -->
| label6      = (05) '''{{IDN}}''' | data6 = 1,549<!-- Peak in 2020 -->
| label7      = (06) '''{{RUS}}''' | data7 = 1,422<!-- Peak in 2019 -->
| label8      = (07) '''{{GER}}''' | data8 = 1,364<!-- Peak in 2019 -->
| label9      = (08) '''{{KOR}}''' | data9 = 912<!-- Peak in 2019 -->
| label10     = (09) '''{{KSA}}''' | data10 = 840<!-- Peak in 2019 -->
| label11     = (10) '''{{MEX}}''' | data11 = 835<!-- Peak in 2019 -->
| label12     = (11) '''{{TUR}}''' | data12 = 763<!-- Peak in 2019 -->
| label13     = (12) '''{{BRA}}''' | data13 = 720<!-- Peak in 2019 -->
| label14     = {{nowrap|(13) '''{{GBR}}'''}} | data14 = 639<!-- Peak in 2019 -->
| label15     = (14) '''{{FRA}}''' | data15 = 597<!-- Peak in 2019 -->
| label16     = (15) '''{{ITA}}''' | data16 = 587<!-- Peak in 2019 -->
| label17     = (16) '''{{IRN}}''' | data17 = 578<!-- Peak in 2017 -->
| label18     = (17) '''{{CAN}}''' | data18 = 537<!-- Peak in 2019 -->
| label19     = (18) '''{{POL}}''' | data19 = 517<!-- Peak in 2019 -->
| label20     = (19) '''{{THA}}''' | data20 = 499<!-- Peak in 2019 -->
| label21     = (20) '''{{EGY}}''' | data21 = 490<!-- Peak in 2020 -->
}}

== References ==
{{Reflist}}


[[Category:Economic sectors|+2]]


{{Sourceattribution|Secondary sector of the economy}}