In this article, we will be taking a look at the 12 biggest industries in the US heading into 2023. To skip our detailed analysis, you can go directly to see 5 Biggest Industries in the US Heading into 2023.
The U.S. is by far the biggest economy in the world, worth $25.7 trillion in the third quarter of 2022, according to the Bureau of Economic Analysis. The strength of the American economy is why it is considered to be a superpower. This economic prowess is why the U.S. has a disproportionate impact on world politics and a disproportionate influence on the global outlook as well. In fact, the strength of the American economy influences most other global economies as well, as seen in the 2008 Recession when the bursting of the U.S. housing bubble was one of the primary reasons behind the most serious global recession since the Great Depression in the 1930s.
Several industries in the US are worth more than $1 trillion each while the biggest industry in the country is actually worth more than $3 trillion. While our rankings will be based on the GDP of each industry, it is important to think about the importance of each industry not just in monetary terms, but in terms of employment as well. The total U.S. civilian labor force, according to the U.S. Bureau of Labor Statistics, is over 162 million people. Some industries such as the tech industry, while contributing a lot to the GDP, do not employ a large proportion of the available workforce as compared to, for example, the manufacturing industry, which alone employs more than 12.3 million people (according the U.S. Bureau of Labor Statistics), or over 7.5% of the available workforce. Construction, which is among the biggest industries in the U.S. heading into 2023, employs 7.4 million people. This shows that just these two industries employ around 20 million people. However, it's actually the services sector which employs the most number of people, with the professional and businesses service sector providing employment to nearly 17.4 million, closely followed by healthcare and social assistance which employs just over 17 million people. The biggest employer in the country, however, is of course, the government, which, when including federal, state and local, provides employment to around 19 million people. However, since the government is not an industry, it does not feature on our list.
However, several industries have started to feel the effects of the recession and tough market conditions. The tech industry saw a huge hit in 2022 with major stocks, including Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc. (NASDAQ:META) and Netflix, Inc. (NASDAQ:NFLX), crashing, resulting in huge losses for investors.
While the S&P 500 index itself is having a rough year, down by 15.7%, it is important to note that the index has seen much worse in the past, dropping by 21% in 2020.
Inflation has touched close to record-highs this year as the cost of living is becoming unbearable for many, especially for the working class who live paycheck to paycheck. According to Forbes, considering the standard definition of two consecutive quarters of negative GDP, the U.S. entered a recession in the summer of 2022. While a recession hasn't been officially confirmed, Deloitte mentioned in its Q3 2022 U.S. Economic Forecast that a recession does seem probable. Bad news regarding inflation continues to float while the Fed's reaction and constant rate hikes have been alarming investors as well.
To determine the biggest industries in the U.S., we have considered their GDP in Q1 and Q2 of 2022, which means that some impact of inflation and the negative elements of the economy are incorporated already. The data for each industry's GDP has been gathered from the U.S. Bureau of Economic Analysis. To get a more global view, you may want to take a look at the 10 Biggest Industries in the World in 2021.
12. Transportation and warehousing
Average gross domestic product of the industry in Q1 2022(in billions): 779.1
Gross domestic product of the industry in Q2 2022 (in billions): 811.2
Transportation and warehousing isn't just a major industry on its own, but provides the required infrastructure for the success of most other industries as well, such as manufacturing, wholesaling and retailing.
11. Administration and waste management services
Average gross domestic product of the industry in 2021 (in billions): 830
Gross domestic product of the industry in Q1 2022 (in billions): 847.6
While it may seem like a negligible industry, the importance of administration and waste management services should not be understated.
Average gross domestic product of the industry in 2021 (in billions): 986.3
Gross domestic product of the industry in Q1 2022 (in billions): 987.9
Construction is one of the most important industries in the U.S. economy, not just for its direct contribution but because it is integral to the success of so many other industries as well.
9. Nondurable manufacturing
Average gross domestic product of the industry in 2021 (in billions): 1,216.8
Gross domestic product of the industry in Q1 2022 (in billions): 1,265
Nondurable manufacturing involves the manufacturing of food, beverages, tobacco, textile mill, petroleum, coal products, paper and printing among others. The goods manufactured in this industry are either consumed immediately or within three years maximum.
Average gross domestic product of the industry in 2021 (in billions): 1,357
Gross domestic product of the industry in Q1 2022 (in billions): 1,365.5
The information industry consists of telecommunication companies, publishing companies, broadcasting companies and sound recording companies, which is why it should come as no surprise that it is one of the biggest industries in the U.S. heading into 2023. AT&T Inc. (NYSE:T) is one of the biggest players operating in the industry.
7. Retail trade
Average gross domestic product of the industry in 2021 (in billions): 1,438.6
Gross domestic product of the industry in Q1 2022 (in billions): 1,452.8
Major retailers operate in the industry, including Walmart, which is the biggest retailer in the U.S. and also the largest company in the world by revenue and number of employees.
6. Durable goods
Average gross domestic product of the industry in 2021 (in billions): 1,486.5
Gross domestic product of the industry in Q1 2022 (in billions): 1,503
The manufacturing of durable goods industry consists of production of wood products, primary metals, fabricated metals, computer and electronic products, electrical equipment, vehicles and transportation. Basically, it consists of goods which are expected to last more than three years. One of the biggest companies in this industry is Hewlett Packard Enterprise Company (NYSE:HPE).
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Disclosure: None. 12 biggest industries in the US heading into 2023 is originally published at Insider Monkey.