What Is the Industrial Sector? Four Economic Categories and Primary Examples
By Indeed Editorial Team
Updated November 22, 2021 | Published January 22, 2021
Updated November 22, 2021
Published January 22, 2021
Economic experts divide the economy into sectors to understand how different industries function and to track certain data points. The industrial sector is one of these broad sectors that composes most of what's known as the secondary sector.
Understanding how the industrial sector functions and relates to the other major sectors can help you better understand how your job supports the overall economy. In this article, we explain what the industrial sector is, describe what makes up the industrial sector and list the other primary economic sectors.
What is the industrial sector?
The industrial sector is a segment of the economy made up of businesses that aid other businesses in manufacturing, shipping or producing their products. The industrial sector is what's known as a secondary sector because the products and services this sector offers to go to other businesses rather than directly to consumers. Supply and demand in other sectors often drive the growth or minimization of the industrial sector, since it's reliant on purchasing from businesses in other sectors.
The main economic sectors
Most economists divide the economy into five sectors. The industrial sector makes up what is often called the secondary sector. Each of the sectors is made up of distinct industries, all of which perform a common step in production. Learn about the other four sectors for a better understanding of how the economy functions:
The primary sector works with raw materials. The distinct industries and companies within this sector forage and harvest natural products that the secondary sector, also known as the industrial sector, then uses to create the parts and products that they'll sell to companies that actually manufacture and sell goods to consumers. Common industries in the primary sector include:
Related: 12 Jobs in Agriculture To Explore
The tertiary sector follows the secondary sector, or industrial sector. The main industries and companies in this economic sector take the materials, parts and products created by the primary and secondary sectors and sell them, completed and manufactured, to consumers. This sector is also known as “the service sector,” since so many of the companies interact directly with consumers. Common industries within the tertiary sector include:
Some economists only recognize three sectors, and they include any industry that interacts directly with consumers in the tertiary sector. Others further divide the economy into five sectors. In this model, the quaternary sector is a subset of the tertiary sector, and it includes industries that focus on intellectual development. Common industries within this sector include:
Scientific research organizations
The final sector, the quinary sector, encompasses those industries that have a major impact on society's organization and efficacy. Like the quaternary sector, the quinary sector is often considered part of the tertiary sector. For those that recognize it as its own sector, it usually includes the highest-ranking decision-makers in major corporations and domestic businesses that help keep society functioning. Common divisions within the quinary sector include:
Executives in the government, science and academic fields
Public services like the fire department and the police department
Domestic endeavors like child care and housekeeping
Read more: 19 Types of Industry Sectors
Industrial sector subcategories
There are many smaller industries within the industrial sector. A few of the largest and most common include:
The automotive industry makes the various materials and parts that form cars, trucks, vans and other automobiles. Primarily, especially when considering the industrial sector connection, the automotive industry refers to businesses that create materials and manufacture vehicles rather than the dealerships or mechanics who sell and maintain the vehicles.
The chemical industry uses chemicals to create materials or products for other companies to make their products. Primarily, companies in the chemical industry take natural elements like oil, water, minerals and natural gas and use chemical processes to turn them into usable components for service-driven companies to produce their products.
Read more: Your Guide to Jobs in the Chemical Industry
The electronics industry is one of the largest under the industrial umbrella. Some experts further divide this industry for a more detailed understanding of the industry's many functions. Primarily, the electronics industry supplies the electric parts and supplies needed to manufacture and sell consumer and other types of electronics to the public.
Related: 15 Jobs in Electronics
The machinery industry produces the machines and equipment necessary to make and manufacture products for consumers. This is a broad sector and includes a range of businesses that supply other companies with machinery, equipment and parts in a range of other industries and sectors. Like most other industrial sector sub-industries, the machinery industry rarely sells its products directly to the public.
The steel industry creates steel products and recycles steel scrap for use in new projects. Steel is one of the main materials used by builders and found in consumer products, so this industry is highly significant to not just the industrial sector but the overall economy. Steel producers sell their products to a variety of businesses for use in a multitude of different building and construction projects.
The aerospace industry is rapidly growing and becoming one of the most important sub-sectors in the economy. The aerospace industry produces materials and parts for aircraft for both the public and private sectors. The five markets the aerospace industry primarily serves are:
Read more: Top Careers in Aerospace Engineering
The textile industry produces materials like cotton and wool and dyes, prepares and finishes these materials for use in other sectors. In most cases, textile businesses provide the raw materials for apparel to clothing manufacturers.
The metalworking industry, of which the steel industry is a large part, is made up of businesses that work with a variety of metals to create parts and materials for other businesses to use in construction or product manufacturing. Other metals besides steel commonly used in the metalworking industry include iron, aluminum, brass and copper.
Related: The Top 13 Largest U.S. Industries
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