Secondary sector of the economy

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In macroeconomics, the secondary sector of the economy is an economic sector in the three-sector theory that describes the role of manufacturing. It encompasses industries that produce a finished, usable product or are involved in construction.

This sector generally takes the output of the primary sector (i.e. raw materials) and creates finished goods suitable for sale to domestic businesses or consumers and for export (via distribution through the tertiary sector). Many of these industries consume large quantities of energy, require factories and use machinery; they are often classified as light or heavy based on such quantities. This also produces waste materials and waste heat that may cause environmental problems or pollution (see negative externalities). Examples include textile production, car manufacturing, and handicraft. [1]

Manufacturing is an important activity in promoting economic growth and development. Nations that export manufactured products tend to generate higher marginal GDP growth, which supports higher incomes and therefore marginal tax revenue needed to fund such government expenditures as health care and infrastructure. Among developed countries, it is an important source of well-paying jobs for the middle class (e.g., engineering) to facilitate greater 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. [2]

The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produce 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.

20 largest Countries by Industrial Output (in PPP terms) according to the IMF and CIA World Factbook, at peak level as of 2020 [ citation needed ]
Economy
Countries by Industrial Output (in PPP terms) at peak level as of 2020 (billions in USD)
(01) Flag of the People's Republic of China.svg  China
11,261
(—) Flag of Europe.svg  European Union
5,729
(02) Flag of the United States.svg  United States
4,093
(03) Flag of India.svg  India
2,604
(04) Flag of Japan.svg  Japan
1,719
(05) Flag of Indonesia.svg  Indonesia
1,549
(06) Flag of Russia.svg  Russia
1,422
(07) Flag of Germany.svg  Germany
1,364
(08) Flag of South Korea.svg  South Korea
912
(09) Flag of Saudi Arabia.svg  Saudi Arabia
840
(10) Flag of Mexico.svg  Mexico
835
(11) Flag of Turkey.svg  Turkey
763
(12) Flag of Brazil.svg  Brazil
720
(13) Flag of the United Kingdom.svg  United Kingdom
639
(14) Flag of France.svg  France
597
(15) Flag of Italy.svg  Italy
587
(16) Flag of Iran.svg  Iran
578
(17) Flag of Canada (Pantone).svg  Canada
537
(18) Flag of Poland.svg  Poland
517
(19) Flag of Thailand.svg  Thailand
499
(20) Flag of Egypt.svg  Egypt
490

The twenty largest countries by industrial output (in PPP terms) at peak level as of 2020, according to the IMF and CIA World Factbook.[ citation needed ]

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References

  1. "Archived copy". Archived from the original on 2020-08-05. Retrieved 2020-07-14.CS1 maint: archived copy as title (link)
  2. "Secondary Industry: Meaning, Types, Characteristics, and Examples".