We all know that the U.S. economy is colossal, but just how large is it? In fact, with a 2017 GDP of more than $18 trillion, the US economy represents more than 20% – or more than 1/5th – of the entire global economy.
Although emerging economic superpowers like China are significant, their economy is still 70% smaller than the U.S. Even when you add up the total commerce from China, Japan, Germany, the UK, France, and Brazil (numbers 2-7 on the list), the U.S. economy is bigger than all of them combined!
There are several ways to calculate the financial role of the largest industries in the United States economy, but we chose three:
- The largest industries based on their percentage share of our Gross Domestic Product,
- The industries that brought in the highest revenues, and
- The industries with the highest net margins.
We purposely didn’t go with the total number of employees to gauge the largest industries in the U.S. because some employ a disproportionate number without actually earning money, like the federal government with 22 million workers.
But we do see that only 10 top industries make up a whopping 76.8% of the U.S. economy! In fact, if each of these industries were a country, they’d rank in the top 20 GDPs in the world.
Let’s take a closer look:
Here are the 10 biggest industries in the United States economy:
GDP share: 4.6%
An umbrella covering the broad fields of publishing, Internet publishing, broadcasting, media, sound recording, motion pictures, and many more.
- Manufacturing of nondurable goods
GDP share: 5.5%
Agriculture, textiles, apparel, petroleum and coal products and others make up the industry of manufactured nondurable goods.
- Retail trade
GDP share: 5.8%
We buy A LOT of things on a daily basis, launching the retail industry onto the top 10 list, with motor vehicle sales and parts and food and beverage purchases leading the way.
- Wholesale trade
GDP share: 6.0%
Before the things we buy get to stores, showrooms, and restaurants, they are wholesaled, which adds up to a more than $1 trillion industry every year.
- Manufacturing of durable goods
GDP share: 6.5%
While the U.S. has seen a dip in homegrown manufacturing as companies move overseas, making all of the durable goods we use for building, infrastructure, machines, appliances, etc. is still a giant industry.
Interesting financial fact:
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- Health care and social assistance
GDP share: 7.1%
Healthcare and services is a huge part of our economy, but the social assistance segment of the industry is less prevalent than we probably realize, making up only 0.8% (almost 1%) of healthcare’s 7.1% contribution to our GDP.
- Finance and insurance
GDP share: 7.2%
Banks, insurance carriers, investment funds, etc. add up to about 1/14th of our total economy, with the Federal Reserve Bank alone constituting a jaw-dropping 3.1% of our total GDP!
- State and local government
GDP share: 9.1%
State and local governmental agencies, organizations, and ventures see a whole lot of money passing through their hands every year.
- Professional and business services
GDP share: 12.0%
Our business world, including the legal field, computer design, and other professional, scientific, and technical services adds up to the second-largest industry in our economy.
- Real estate (including renting and leasing)
GDP share: 13.0%
Most people don’t realize that the real estate industry is the leading segment of our economy, adding up to 13% of our entire Gross Domestic Product. In fact, if you add in the mortgage and insurance industries to the real estate segment, these three are responsible for 20% of our entire economy!
But just being big doesn’t mean they’re making a lot of money (as in the case with #3, state and local governments), so how would we rank the industries that are the most profitable? This list is a lot harder to put together, considering that there’s no clear-cut way to measure net profits from every company in each industry. But we can add up the annual revenues for the top firms in each sector. Real estate market is being disrupted by new platforms such as Redfin, that provide similar services to traditional brokerage at much lower fees. The overall revenue in the market from real estate home sales and mortgages perspective is driven by mortgage rates, which impact demand for home purchases and loans. In addition, higher credit scores increase the likelihood getting mortgages and buying homes. If you need credit repair to apply for such a loan, you can work with a credible service provider such as our company.
10 Most profitable industries in the United States economy:
- Advertising & Marketing
$8.3 billion revenue last year for the 468 top advertising and marketing companies, showing that promoting and selling things can be just as lucrative as manufacturing them.
Home building is back again after getting walloped during the last recession, and 232 of the biggest 232 builders, contractors, and electrical companies took home $8.34 billion in sales last year.
- Financial Services
The most prominent 246 financial companies, banks, investment firms, etc. combined for $11.8 billion in revenues last year.
The U.S. energy market remains dynamic, with just 100 front running firms earning $12.4 billion in revenues last year, led by XOOM Energy out of North Carolina.
- Human Resources
The top 203 human resources companies cashed in on $13 billion profits last year, thanks to the fact that companies invested heavily in corporate training with a 15% increase from the previous year.
- Consumer Products & Services
While this is a broad category, the top 226 companies brought home $14.4 billion last year, with some pretty cool innovations.
- Logistics & Transportation
Getting from Point A to Point B may not be sexy, but it sure is profitable, with the top 157 transportation or logistics firms earning $15.2 revenue last year.
- Business Products & Services
Encompassing just about every role you could imagine from building mobile apps to wholesaling to restaurants, this sector saw $15.9 billion in profits last year.
- IT Services
While information tech and services is #10 on the list of biggest industries in the U.S., it ranks #2 overall in profits, with a stunning $17.5 billion in profits last year, led by companies like TRYFACTA, which provides cloud, big data, and IT services.
Pharmaceutical manufacturing and sales, genetic testing, workplace drug testing, and all of the hospitals and medical services in the U.S. totaled $24.4 billion in revenues last year, making it the most profitable sector of our economy!
We now know which industries are the biggest and bring in the most total revenue, but which specific fields are lean and mean, earning the highest net margins?
10 U.S. Industries with the highest net margins:
- Major banks
22.9% net margins last year
- Regional banks
23% net margins last year
- IT services
24% net margins last year
- Savings banks
24% net margins last year
24.6% net margins last year
- Internet software/services
25% net margins last year
- Major pharmaceutical companies
25.5% net margins last year
27.2% net margins last year
- Investment managers
29.1% net margins last year
- Generic pharmaceutical companies
30% net margins last year
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