The 11 largest industries in the US by revenue contribute the most to the U.S economy and employ tens of millions of people.
The U.S is the richest country in the world, fueled by large amounts of natural resources, a large and influential financial market and the biggest consumer market. In this way, it’s understandable that there are hundreds of industries and sub-industries that are part of the U.S economy, which employ around 154 million people, with the largest employer being the U.S government. Given that the U.S government employs around 22 million people, it’s also one of the largest industries in the economy, with a total gross output of $3.60 trillion as of 2016.
The U.S economy inched up by 1.6% in 2016 and is expected to add 2.4% this year and maintain a rate of between 2% and 3% in the near future, which is a healthy rate. Among the industries that registered the highest growth last year were Construction, IT Services, Financial Services, Business Products and Services, and Health, according to Inc. Some of these high-growth industries are also among the 11 largest industries in the US by revenue as we shall see later.
At the same time, many industries in the U.S have been struggling, particularly those related to mining and petroleum extraction. Sageworks, a financial information company, reported that private companies in the U.S registered an annual sales increase of 7% last year across all industries. However, the industry that includes companies providing support services for oil and gas extraction saw its sales slide by 23% in 2016, as oil and commodity prices declined. Lower gasoline prices also affected gasoline stations, whose revenue fell by 9%.
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Other industries that saw their aggregate revenue decline were those related to building machines and metal goods, such as the metalworking machinery manufacturing industry and manufacturers of fabricated metal products like machine screws, nuts and bolts. These industries had seen significant growth after the last recession and are now seeing a cooldown, Sageworks reckons.
Different sources provide different classifications, but the US Bureau of Economic Analysis (which is part of the Department of Commerce) takes into account a total of 402 industries and sub-industries, as well as 69 commodities. To compile the list of the largest industries in the U.S by revenue, we have selected the industries or subsectors as they are classified by the North American Industry Classification System and their gross output. Gross output of industries represents a measure of an industry’s sales or receipts, which can include sales to final users or sales to other industries. However, it’s important to point out that gross output can take into account both the sales of intermediate and final products, which may result in double-counting.
Having said that, let’s take a look at the 11 largest industries in the US by revenue.
11. Food Services and Drinking Places
Gross Output: $765.17 Billion
Food Services and Drinking Places is a subsector that includes industries that engage in the preparation of meals, snacks and beverages to customers for immediate consumption. It includes full service restaurants, limited-service eating places, special food services, and drinking places. During 2016, the gross output of the Food Services and Drinking Places subsector, which is part of the accommodation and food services sector, increased by 5.76%.
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10. Chemical Products Manufacturing
Gross Output: $842.36 Billion
The Chemical Products Manufacturing industry saw its gross output grow by 1.63% during the last year. Chemical products manufacturing is part of the non-durable goods group within the manufacturing sector. At the end of 2016, chemical products manufacturing represented nearly 30% of the total gross output of non-durable goods manufacturing.
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9. Administrative and Support Services
Gross Output: $860.45 Billion
Administrative and Support Services is a subsector that includes companies that provide office administrative, facilities support, employment, business support, travel arrangement and reservation, investigation and security services, as well as services to buildings and dwellings and other support services. The administrative and support services subsector saw total receipts advance by 6.08% during 2016.
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8. Hospitals
Gross Output: $869.26 Billion
Next in line in our list of the largest industries in the US by revenue are hospitals. The hospitals industry’s gross output appreciated by 8.33% during 2016. Hospitals are part of the hospitals and nursing and residential care facilities group of industries, which is included in the Healthcare and social assistance sector.
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7. Broadcasting and Telecommunications
Gross Output: $871.81 Billion
The Broadcasting and Telecommunications subsector is the largest in the Information sector in terms of gross output, amassing 54% of the gross output of that sector. During 2016, Broadcasting and Telecommunications registered gross output growth of 3.06%. The subsector employs 758,000 people as of September. One of the top ETFs that offers exposure to telecom stocks is the iShares Dow Jones US Telecom (ETF) (BATS:IYZ).
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6. Insurance Carriers and Related Activities
Gross Output: $931.53 Billion
Insurance Carriers and Related Activities is part of the Finance and Insurance sector, which has total gross output of $2.38 trillion. The industry includes insurance carriers and agencies, brokerages, and other insurance related activities and its gross output has appreciated by 4.65% during 2016. The industry employs around 2.27 million people. To invest in Insurance Carriers and Related Activities, you can consider the iShares Dow Jones US Insurance Index ETF (NYSEARCA:IAK), which offers exposure to U.S insurance stocks.
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5. Other Retail
Gross Output: $932.72 Billion
On the fifth spot in the list of the 11 largest industries in the US by revenue is Other Retail. Other Retail is an industry within the Retail Trade, which includes the retail of products that are not covered in other industries: motor vehicles and parts, food and beverage, and general merchandise. The Other Retail industry’s gross output grew by 3.17% last year.
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4. Food and Beverage and Tobacco Products Manufacturing
Gross Output: $949.39 Billion
The manufacturing of food, beverage and tobacco products is included in the non-durable goods group of industries, all part of the manufacturing sector. The gross output of food, beverage and tobacco products inched up by 0.42% during 2016. The manufacturing of food, beverage and tobacco products is the largest manufacturing industry in the U.S in terms of output.
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3. Other Real Estate
Gross Output: $1,098.62 Billion
Other Real Estate is an industry included in the Real Estate sector that includes all real estate in the U.S excluding housing (like commercial, industrial, etc.). The industry had growth of 5.04% during 2016. Commercial real estate has been in focus lately as more companies are being urged by their shareholders to unlock the value of their real estate assets through REIT spin-offs in order to improve the company’s valuation on the stock market.
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2. Miscellaneous Professional, Scientific, and Technical Services
Gross Output: $1,368.87 Billion
Miscellaneous Professional, Scientific, and Technical Services includes companies that provide professional, scientific, and technical services that are not included in other industries within the professional, scientific, and technical services industries, like legal services, computer system design and related services, engineering, bookkeeping, etc. Miscellaneous professional, scientific, and technical services can include marketing research and public opinion polling, photographic services, and translation and interpretation services. During 2016, the gross output of the industry increased by 6.28%.
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1. Housing
Gross Output: $2,010.66 Billion
Last but not least, is Housing, which is part of the real estate sector and the real estate and rental and leasing supersector. The gross output of the housing industry registered growth of 4.76% during 2016. There are over 135 million housing units in the U.S, with 560,000 houses sold last year and the homeownership rate currently stands at 63.7%. The iShares Dow Jones US Home Const. (ETF) (BATS:ITB) provides exposure to the homebuilding industry, including companies engaged in the construction of houses as well as companies related to housing like Home Depot Inc (NYSE:HD).
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These are the 11 largest industries in the US by revenue as measured by their gross output. The industries included in this list are only private industries, but some government industries also have substantial gross output, like the general government, whose output stands at $2.18 trillion. The total gross output of private goods-producing industries amounts to $7.99 trillion, while the output of private services-producing industries stands at a whooping $20.60 trillion. The gross output of information communications technology-producing industries, which includes companies specialized in computer and electronic product manufacturing, software publishers, data processing, internet publishing and other companies amounts to around $1.83 trillion as of 2015, according to the Bureau of Economic Analysis.
Disclosure: None
