7.1 Sectors of an Economy

7.1 Sectors of an Economy mxw142

The geo-advantages which Ryerson and Aronoff describe in Why ‘Where’ Matters vary across sectors of an economy. Industries are the production of goods or services that contribute to a nation’s gross domestic product (GDP). Standard classification systems ensure clarity in describing industries and communicating the purpose, products, and sector of a business. There are differences in US and global classifications; but most share similar major sectors. NAICS was discussed in Lesson 4, matching the industry sectors published by the Bureau of Labor Statistics, U.S. Department of Labor.

The most general description of industry is into primary, secondary, and tertiary:

  • Primary sectors, as transforming natural resources into primary products, e.g., agriculture, fishing, forestry, and mining.
  • Secondary sectors, as finished products used by end consumers and businesses that have factories, use machinery, and consume energy; e.g., aerospace, automobile, apparel, chemical, textile, consumer electronics, energy, metals, industrial equipment, or shipbuilding.
  • Tertiary, or the Services sectors, delivering intangible goods and services, e.g., banking, insurance, transportation, retail, education, tourism, news, hospitality, or consulting.

Financial Markets use the Global Industry Classification Standard (GICS), developed by MSCI & Standard and Poor’s:

  • Energy
  • Materials
  • Industrials
  • Consumer Discretionary
  • Consumer Staples
  • Health Care
  • Financials
  • Information Technology
  • Telecommunication Services
  • Utilities
  • Real Estate

The Bureau of Labor Statistics organizes industry sectors into defined classes (Table 6.1):

  • Goods Producing sectors, e.g., natural resources and mining, construction, manufacturing
  • Service Providing sectors, e.g., trade, transportation, utilities, information, Financial activities, professional and business services, education and health services, leisure and hospitality, legal, healthcare, and entertainment
  • Agriculture, forestry, fishing, and hunting
Table 6.1: Employment by Major Industry Sector
Industry SectorEmploymentChangePercent distributionCompound annual rate of change
2006201620262006-162016-262006201620262006-162016-26
Total(1)144,047.0150,539.9160,328.86,492.99,788.9100.0100.0100.00.40.6
Nonagriculture wage and salary(2)132,462.2139,811.5149,131.67,349.39,320.192.092.993.00.50.6
Goods-producing, excluding agriculture21,815.319,170.519,227.0-2,644.856.515.112.712.0-1.30.0
Services-providing110,646.9120,641.0129,904.69,994.19,263.676.880.181.00.90.7
Agriculture, forestry, fishing, and hunting(3)2,111.32,138.32,027.726.9-110.51.51.41.30.1-0.5
Nonagricultural self-employed workers9,473.68,590.29,169.5-883.4579.36.65.75.7-1.00.7
  • Mining
523.2843.8924.0320.680.20.40.60.64.90.9
  • Construction
6,976.26,138.46,928.8-837.8790.44.84.14.3-1.31.2
  • Manufacturing
14,315.912,188.311,374.2-2,127.6-814.19.98.17.1-1.6-0.7
  • Utilities
563.8553.0505.1-10.8-47.90.40.40.3-0.2-0.9
  • Wholesale trade
5,663.05,826.06,151.4163.0325.43.93.93.80.30.5
  • Retail trade
15,058.215,364.516,129.1306.3764.610.510.210.10.20.5
  • Transportation and warehousing
4,248.64,640.34,776.9391.7136.62.93.13.00.90.3
  • Information
3,118.32,739.72,712.6-378.6-27.12.21.81.7-1.3-0.1
  • Financial activities
8,105.17,979.58,486.7-125.6507.25.65.35.3-0.20.6
  • Professional and business services
16,394.919,096.220,985.52,701.31,889.311.412.713.11.50.9
  • Educational services; private
2,762.53,417.43,756.1654.9338.71.92.32.32.20.9
  • Health care and social assistance
14,429.818,057.421,852.23,627.63,794.810.012.013.62.31.9
  • Leisure and hospitality
12,493.114,710.015,651.22,216.9941.28.79.89.81.60.6
  • Other services
6,188.36,394.06,662.0205.7268.04.34.24.20.30.4
  • Federal government
2,730.02,729.02,345.6-1.0-383.41.91.81.50.0-1.5
  • State and local government
18,891.319,134.019,890.1242.7756.113.112.712.40.10.4
  • Agricultural wage and salary
1,149.01,384.01,307.3235.0-76.70.80.90.81.9-0.6
  • Agricultural self-employed workers
962.3754.3720.4-208.1-33.80.70.50.4-2.4-0.5

Footnotes: 

  1. Employment data for wage and salary workers are from the BLS Current Employment Statistics survey, which counts jobs, whereas self-employed, and agriculture, forestry, fishing, and hunting are from the Current Population Survey (household survey), which counts workers.
  2. Includes wage and salary data from the Current Employment Statistics survey, except private households, which is from the Current Population Survey. Logging workers are excluded.
  3. Includes agriculture, forestry, fishing, and hunting data from the Current Population Survey, except logging, which is from the Current Employment Statistics survey. Government wage and salary workers are excluded.
Credit: Bureau of Labor Statistics, 2018. Employment by major industry sector.

Similar classification schemes assist in standardizing the descriptions of global commerce.