Secondary Industry

The secondary industry (or secondary sector) is the sector of an economy that transforms raw materials into finished or intermediate goods, comprising manufacturing, construction, and utilities such as electricity and water supply. It is the industrial sector that historically drove the rise of modern economies.

Definition

The secondary sector encompasses activities that process, manufacture, and construct products. It includes:

• Manufacturing
• Construction
• Electricity, gas, and water supply
• Mining-related processing

These activities add value by transforming raw materials from the primary sector into intermediate or final goods.

Economic role

The secondary sector plays a central role in the process of economic development and industrial upgrading. Manufacturing in particular is associated with technological progress, economies of scale, and the development of human capital. In advanced economies, the share of the secondary sector has generally declined relative to services, a shift sometimes described as deindustrialisation.

Aspect	Description
Value added	Historically the engine of productivity growth and income convergence.
Employment	Rises during industrialisation, then stabilises or falls in advanced economies.
Linkages	Strong forward and backward linkages with other sectors.

See also

• Primary Industry
• Tertiary Industry
• Industrial Structure
• Industrial Upgrading