manufacturing sector
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In
macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...
, the secondary sector of the economy is an economic sector in the three-sector theory that describes the role of manufacturing. It encompasses
industries Industry may refer to: Economics * Industry (economics), a generally categorized branch of economic activity * Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery * The wider industrial secto ...
that produce a finished, usable product or are involved in construction. 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 that are feedstock for future finished products. As feedst ...
s) and creates
finished goods Finished goods are goods that have completed the manufacturing process but have not yet been sold or distributed to the end user. Manufacturing Manufacturing has three classes of inventory: # Raw material # Work in process # 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 pr ...
es 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 In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...
). Examples include
textile production Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...
, car manufacturing, and handicraft. Manufacturing is an important activity in promoting
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
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 Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
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 priv ...
. Among developed countries, it is an important source of well-paying jobs for the middle class (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 society ...
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 or farming is the practice of cultivating Plant, plants and livestock. Agriculture was the key development in the rise of Sedentism, sedentary human civilization, whereby farming of Domestication, domesticated species created food ...
and other raw materials (i.e., primary sector) tend to grow slowly and remain either
under-developed Underdevelopment, in the context of international development, reflects a broad condition or phenomena defined and critiqued by theorists in fields such as economics, development studies, and postcolonial studies. Used primarily to distinguish st ...
or
developing economies A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreeme ...
. 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 the economics study of the public sector, 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 o ...
.


References

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