Secondary sector of the U.S. - statistics & facts
Industries within the United States are sorted into three major economic categories, depending on the specific resource each industry creates or provides. Industries responsible for extracting raw materials fall under the primary sector, and include oil and gas extraction, agriculture, mining, or fishing industries, to name a few. The service, or tertiary sector is responsible for the distribution of goods and services to customers. However, prior to their distribution, raw or extracted materials must first be manufactured. This process is done so through industries belonging to the secondary sector. Often referred to as the manufacturing sector, this sector is responsible for the final production of goods such as chemical products, computer and electrical products, and machinery.
Depending on the means through which products are manufactured, they are categorized into either discrete or process manufacturing. Process manufacturing involves adding or mixing raw materials to one another in order to create formulas as the finished product. This type of manufacturing mixes or blends ingredients together that, when finished, are essentially irreversible. Food and beverage products are an example goods produced through process manufacturing, and is the nation’s second largest manufacturing industry. Discrete manufacturing is the process of producing goods through the assembly of individual parts. Once assembled, it should still be possible to return the final product back to its original components. Computer and electronic products are produced through discrete manufacturing, as well as machinery, cars, appliances, including all of their components.
There are additional indices used to assess a sector’s performance, such as the Industrial Production Index (IPI), which is a monthly measure of industrial production performance in the United States. A value of over 100 reflects positive performance, whereas a value below 100 shows that production was below standard relative to the base year. In 2023, the IPI in the U.S. remained consistently above 100 percent. In order to determine an industry’s growth potential, the Industrial Capacity Index (ICI) estimates the extent to which industries can increase production in a sustainable manner. Similarly to the IPI, an ICI value of over 100 indicates a strong potential for sustainable production.
Industry Breakdown
Following their extraction through the primary sector, raw materials are passed down to the secondary sector, where they are fashioned into final products through processing and manufacturing. Overall, the manufacturing sector added 2.8 trillion U.S. dollars to the GDP of the U.S in 2023. Given how this sector encompasses all produced goods, it is comprised of many industries including food processing, automotive, consumer goods, and energy. In 2023, chemical production was the most valuable output of the secondary sector, having contributed 513 billion U.S. dollars to the national GDP.Depending on the means through which products are manufactured, they are categorized into either discrete or process manufacturing. Process manufacturing involves adding or mixing raw materials to one another in order to create formulas as the finished product. This type of manufacturing mixes or blends ingredients together that, when finished, are essentially irreversible. Food and beverage products are an example goods produced through process manufacturing, and is the nation’s second largest manufacturing industry. Discrete manufacturing is the process of producing goods through the assembly of individual parts. Once assembled, it should still be possible to return the final product back to its original components. Computer and electronic products are produced through discrete manufacturing, as well as machinery, cars, appliances, including all of their components.
Indices
While measuring an industry’s contribution to the GDP is an important indicator of a sector’s economic status, there are additional, more in-depth assessments available such as the Manufacturing Purchasing Managers’ Index (PM) of the United States. There is a PMI for each economic sector in order to gauge the sector’s overall well-being. In the case of the manufacturing sector, the index is made up using five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. The monthly index values reflect the economic status of the manufacturing sector, with any value under 50 percent indicating loss, and any value over 50 percent indicating growth. The value came to of 50.3 percent in March 2024, the first time it rose above 50 since October 2022.There are additional indices used to assess a sector’s performance, such as the Industrial Production Index (IPI), which is a monthly measure of industrial production performance in the United States. A value of over 100 reflects positive performance, whereas a value below 100 shows that production was below standard relative to the base year. In 2023, the IPI in the U.S. remained consistently above 100 percent. In order to determine an industry’s growth potential, the Industrial Capacity Index (ICI) estimates the extent to which industries can increase production in a sustainable manner. Similarly to the IPI, an ICI value of over 100 indicates a strong potential for sustainable production.
