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Reference.org
Secondary sector of the economy
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<p>In <a href="/facts/Macroeconomics/4dcQAdCr">macroeconomics</a>, the secondary sector of the economy is an <a href="/facts/Economic_sector/BuYEmoDX">economic sector</a> in the <a href="/facts/Three-sector_model/T3qrQjU9">three-sector theory</a> that describes the role of <a href="/facts/Manufacturing/3qW7bcdy">manufacturing</a>. It encompasses <a href="/facts/Industry_(economics)/nlB2hvkF">industries</a> that <a href="/facts/Production_(economics)/G5mF3WkI">produce</a> a finished, usable <a href="/facts/Product_(business)/l9P9fUJa">product</a> or are involved in <a href="/facts/Construction/58eqDhy9">construction</a>. </p><p>This sector generally takes the output of the <a href="/facts/Primary_sector_of_the_economy/ghBwWtv5">primary sector</a> (i.e. <a href="/facts/Raw_material/cthCpclF">raw materials</a> like metals, wood) and creates <a href="/facts/Finished_goods/B2RBsBRt">finished goods</a> suitable for sale to domestic <a href="/facts/Business/For1e8Nh">businesses</a> or <a href="/facts/Consumer/dMflnQGX">consumers</a> and for <a href="/facts/Export/t8wVcoNL">export</a> (via distribution through the <a href="/facts/Tertiary_sector_of_the_economy/IbtKqotL">tertiary sector</a>). Many of these industries consume large quantities of energy, require <a href="/facts/Factory/GPIW0snN">factories</a> and use machinery; they are often classified as <a href="/facts/Light_industry/Kwv9uAP4">light</a> or <a href="/facts/Heavy_industry/yFY3ovdz">heavy</a> based on such quantities. This also produces <a href="/facts/Waste/qLmtkUQ4">waste</a> materials and <a href="/facts/Waste_heat/nGBH1Vc8">waste heat</a> that may cause environmental problems or <a href="/facts/Pollution/JRagxumQ">pollution</a> (see <a href="/facts/Externality/hGgw7gtT">negative externalities</a>). Examples include <a href="/facts/Textile_industry/KYCR1hcR">textile production</a>, <a href="/facts/Automotive_industry/fGFKUIlA">car manufacturing</a>, and <a href="/facts/Handicraft/MXjkwQQD">handicraft</a>. </p><p>Manufacturing is an important activity in promoting <a href="/facts/Economic_growth/kEXm3jWm">economic growth</a> and <a href="/facts/Economic_development/4KRrMBaM">development</a>. Nations that export manufactured products tend to generate higher marginal <a href="/facts/Gross_domestic_product/zQRgyFKc">GDP</a> growth, which supports higher <a href="/facts/Income/T1B63U7z">incomes</a> and therefore marginal <a href="/facts/Tax_revenue/6sTDzu0k">tax revenue</a> needed to fund such government expenditures as <a href="/facts/Health_care/LPS1WKbI">health care</a> and <a href="/facts/Infrastructure/QJvbsSpl">infrastructure</a>. Among <a href="/facts/Developed_country/sqwTSDHm">developed countries</a>, it is an important source of well-paying jobs for the <a href="/facts/Middle_class/6EUq9Mue">middle class</a> (e.g., engineering) to facilitate greater <a href="/facts/Social_mobility/90ofD8YP">social mobility</a> for successive generations on the economy. Currently,[<i>when?</i>] an estimated 20% of the <a href="/facts/Labor_force/rg2g6n5W">labor force</a> in the United States is involved in the secondary industry. </p><p>The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produce <a href="/facts/Agriculture/TGztqzJs">agricultural</a> and other raw materials (i.e., <a href="/facts/Primary_sector_of_the_economy/ghBwWtv5">primary sector</a>) tend to grow slowly and remain either <a href="/facts/Under-developed/wbn9Wx5h">under-developed</a> or <a href="/facts/Developing_economies/eTfS4kxl">developing economies</a>. The value added through the transformation of raw materials into finished goods reliably generates greater <a href="/facts/Profitability/kfPA9rfB">profitability</a>, which underlies the faster growth of <a href="/facts/Developed_economies/4KRrMBaM">developed economies</a>. </p> 20 largest countries by industrial output (PPP-adjusted, billion <a href="/facts/United_States_dollar/naEEDUhC">USD</a>) according to the <a href="/facts/International_Monetary_Fund/tPSTWWS4">IMF</a> and <a href="/facts/The_World_Factbook/q4qMpEQh">CIA World Factbook</a>, at peak level as of 2020:<table><tbody><tr><th scope="col">Economy</th><th scope="col">Industrial output</th></tr><tr><th scope="row">(01) <a href="/facts/China/lTjIXY5p">China</a></th><td>11,261</td></tr><tr><th scope="row">(—) <i> <a href="/facts/European_Union/6GYcR8qM">European Union</a></i></th><td>5,729</td></tr><tr><th scope="row">(02) <a href="/facts/United_States/P0sCdLe5">United States</a></th><td>4,093</td></tr><tr><th scope="row">(03) <a href="/facts/India/1kKHcnxM">India</a></th><td>2,604</td></tr><tr><th scope="row">(04) <a href="/facts/Japan/U5mz0SRT">Japan</a></th><td>1,719</td></tr><tr><th scope="row">(05) <a href="/facts/Indonesia/vQnWU3IW">Indonesia</a></th><td>1,549</td></tr><tr><th scope="row">(06) <a href="/facts/Russia/jfkCwyxn">Russia</a></th><td>1,422</td></tr><tr><th scope="row">(07) <a href="/facts/Germany/paluuWBX">Germany</a></th><td>1,364</td></tr><tr><th scope="row">(08) <a href="/facts/South_Korea/pCobAaVw">South Korea</a></th><td>912</td></tr><tr><th scope="row">(09) <a href="/facts/Saudi_Arabia/uyUpe1J2">Saudi Arabia</a></th><td>840</td></tr><tr><th scope="row">(10) <a href="/facts/Mexico/IT5bwhdh">Mexico</a></th><td>835</td></tr><tr><th scope="row">(11) <a href="/facts/Turkey/KIYAWAs0">Turkey</a></th><td>763</td></tr><tr><th scope="row">(12) <a href="/facts/Brazil/QHkG46GL">Brazil</a></th><td>720</td></tr><tr><th scope="row">(13) <a href="/facts/United_Kingdom/kuPAILt2">United Kingdom</a></th><td>639</td></tr><tr><th scope="row">(14) <a href="/facts/France/CxIeIKM3">France</a></th><td>597</td></tr><tr><th scope="row">(15) <a href="/facts/Italy/tUf0PDYF">Italy</a></th><td>587</td></tr><tr><th scope="row">(16) <a href="/facts/Iran/24yukge8">Iran</a></th><td>578</td></tr><tr><th scope="row">(17) <a href="/facts/Canada/cWWFM8oc">Canada</a></th><td>537</td></tr><tr><th scope="row">(18) <a href="/facts/Poland/eXJ7fd0D">Poland</a></th><td>517</td></tr><tr><th scope="row">(19) <a href="/facts/Thailand/GCUnN4JK">Thailand</a></th><td>499</td></tr><tr><th scope="row">(20) <a href="/facts/Egypt/8Ttg0JwB">Egypt</a></th><td>490</td></tr> <tr><td colspan="10"><p>The twenty largest countries by industrial output (in <a href="/facts/Purchasing_power_parity/qpRMGaXG">PPP</a> terms) at peak level as of 2020, according to the <a href="/facts/International_Monetary_Fund/tPSTWWS4">IMF</a> and <a href="/facts/The_World_Factbook/q4qMpEQh">CIA World Factbook</a>.</p></td></tr></tbody></table>