macroeconomics Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (econ ...

, the secondary sector of the economy is an economic sector in the three-sector theory that describes the role of

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer ...

. It encompasses industries that

produce In American English, produce generally refers to wikt:fresh, fresh List of culinary fruits, fruits and Vegetable, vegetables intended to be Eating, eaten by humans, although other food products such as Dairy product, dairy products or Nut (foo ...

a finished, usable product or are involved in

construction Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...

. This sector generally takes the output of the primary sector (i.e.

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials/Intermediate goods that are feedstock for future finished ...

s like metals, wood) and creates finished goods suitable for sale to domestic

business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...

es or

consumer A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

s and for

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...

(via distribution through the tertiary sector). Many of these industries consume large quantities of energy, require

factories A factory, manufacturing plant or production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. Th ...

and use machinery; they are often classified as

light Light, visible light, or visible radiation is electromagnetic radiation that can be visual perception, perceived by the human eye. Visible light spans the visible spectrum and is usually defined as having wavelengths in the range of 400– ...

or heavy based on such quantities. This also produces

waste Waste are unwanted or unusable materials. Waste is any substance discarded after primary use, or is worthless, defective and of no use. A by-product, by contrast is a joint product of relatively minor Value (economics), economic value. A wast ...

materials and waste heat that may cause environmental problems or

pollution Pollution is the introduction of contaminants into the natural environment that cause harm. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the component ...

(see negative externalities). Examples include textile production, car manufacturing, and

handicraft A handicraft is a traditional main sector of craft making and applies to a wide range of creative and design activities that are related to making things with one's hands and skill, including work with textiles, moldable and rigid material ...

. Manufacturing is an important activity in promoting

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

and development. Nations that export manufactured products tend to generate higher marginal GDP growth, which supports higher

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. F ...

s and therefore marginal

tax revenue Tax revenue is the income that is collected by governments through taxation. Taxation is the primary source of government revenue. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural reso ...

needed to fund such government expenditures as

health care Health care, or healthcare, is the improvement or maintenance of health via the preventive healthcare, prevention, diagnosis, therapy, treatment, wikt:amelioration, amelioration or cure of disease, illness, injury, and other disability, physic ...

and

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

. Among developed countries, it is an important source of well-paying jobs for the

middle class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. C ...

(e.g., engineering) to facilitate greater

social mobility Social mobility is the movement of individuals, families, households or other categories of people within or between social strata in a society. It is a change in social status relative to one's current social location within a given socie ...

for successive generations on the economy. Currently, an estimated 20% of the labor force in the United States is involved in the secondary industry. The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produce

agricultural Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created f ...

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 In economics, economic development (or economic and social development) is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and object ...

References

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See also

References