The American economy represents 20% of the world’s total economic power and is bigger than the top 2-7 economies in the world combined! This considerable size helps fuel the world’s financial success and gives many excellent opportunities to people who live within its borders.
But just how much money is in the American economy and its many industries? Let’s look at a few of the most profitable in the nation to get an idea. You are going to be surprised by many of these listings. Others may seem more obvious, but we promise that you’ll have a few shocks along the way!
How Each Industry Was Ranked
When we were examining the various industries throughout the country, we took a look at multiple factors before deciding how much money is in each. These factors are essential to consider because they’ll affect numerous elements of these rankings. We examined:
- Gross Domestic Product – This ranking indicates how much money an industry generates before any expenses are removed. In some cases, you might find that industries with a higher GDP rank slightly lower than others on this list because their net was lower than expected.
- Net Profits – After expenses like taxes, wages, and other factors are taken out of an industry’s GDP, you have their net profits. This factor is significant because it shows whether or not a field has a higher chance of expanding due to more available income after expenses.
- Net Margins – In some cases, an industry may have what seems like a high net, but the margin between it and the expenses is minimal. Thus, we ranked industries higher if their net margin was more considerable, even in cases where the industry itself may have produced less overall money than another. Our rankings take these factors into account to minimize confusion.
What is particularly striking about these numbers is that each of the top 10 ranking industries in the nation would also rank in the top 20 GDPs if they represented a country. So, let’s take a look at a few of them to see how much money is in these sectors and which might make a good investment for you.
The Top 10 Fields in the American Economy
Now that you understand how we ranked each of these industries, you can better understand the numbers we’ll include throughout our rankings. In addition, you’ll learn more about the GDP share of each of these fields, how much money they create, and more. While we won’t go into so much detail that this list becomes boring, you should have a good idea of how much money is in each field.
1. Real Estate: How Much Money is In This Field?
The real estate industry is the largest market in the economy, with a GDP of $2.265.7 billion. This represents 13% of the GDP. But how much money is in this field for those who have a house for sale? There are a few different representations to consider when deciding to get into this field.
First, if you added things like mortgage, insurance, and fields like a local roofing company and other repair factors, this GDP jumps to 20% of the total economy. And this ranking is so high because material costs and net gains are so high compared to other industries on the market.
And if you factor in cleaning and other industries, such as those that sell industrial cleaning solutions, you can anticipate this number to go even higher. At this point, it’s hard to calculate the full potential of the real estate market. It could be up to 25% when combining all of these factors.
2. Business Services – Another Huge Industry
Just behind real estate for GDP share is professional and business services, which make up a total of 12% of the economy. But how much money is in this field in numbers? It has an estimated $2,098.3 billion, though it will vary depending on the year and various other factors.
This market includes computer design, scientific services, technical repairs,like working with a diesel engine, or, also in the automotive industry, services that a bumper repair mechanic would provide, and much more. The broadness of this particular industry is a massive part of why it is so profitable and vital to the American sector.
This field can also include many legal elements, such as working with a workers comp lawyer when a worker in injured, and for the worst-case scenario in a business, bankruptcy attorneys are there to help as well. And depending on how you define the professional business world, these numbers could go even higher in some fields.
3. Non-Federal Government – Surprisingly Important to the Economy
This listing is probably going to be one of the most surprising on our list. Did you know how much money is in state and local government? When combining each state and city across the nation (even the smallest village), we have an estimated 9.1% of the economy or $1,538.7 billion.
Why is this number so significant? First, just think about how much money cities and states spend on various jobs and repairs. For example, 99% of road repairs are funded by state and city governments, meaning that it can be considered part of this field and supported almost entirely.
And when you factor in the total costs of running the government (such as the various agencies and organizations that keep the bureaucracy humming), you have an outstanding share of the GDP. Remember – this number may also go higher over the years as the government structure grows.
4. Financial and Industrial Fields – Perhaps Lower Than Expected
Some readers are surprised that the financial field is so low on this list compared to things like real estate and state government. But just how much money is in this field? It’s still a somewhat respectable $1,261.2 billion or so for about 7.2% of the country’s total GDP.
This field breaks down into things like the many banks across the country, insurance companies providing you coverage for various elements, lenders throughout the nation, investment professionals, and much more. However, these industries combine to take up just 3.1% of the economy.
And the Federal Reserve Bank takes up the other 3.1% of this field just by itself. That vast number is staggering to consider. It is likely the most significant contributor to the economy if we break it down into individual institutions. Just think about that the subsequent time interest rates changes.
5. Healthcare – Carries a Heavy Burden
Just behind the financial field (and with the potential to overtake it in just a few years) lies the healthcare industry. Just how much money is in this field? The best estimates put it at about $1,244.2 billion of the total economy or 7.1% of the GDP or just a few million less than the financial field.
And this industry will likely top it and become even more prevalent as time passes. As more and more baby boomers age and pass away, the medical field will expand and grow to meet their needs. Interestingly, services like creating a hearing aid or other vital surgeries such as installing a gastric balloon are not the most considerable portion of the economy.
That’s because the social assistance element (i.e., the doctors and hospitals that fuel the field) make up under 1% of the industry. Instead, most healthcare is driven by research, administration, and other factors. However, that doesn’t mean that this industry won’t continue to grow in the future.
6. Durable Good Manufacturing – Still an Important Factor
While manufacturing was once the main lifeblood of the nation, it has significantly decreased in recent years. Part of this fact is the introduction of robot-based manufacturing, which improved production but cut down on the human factor considerably in many factories.
The nation also has a bad habit of shipping many of its durable goods manufacturing overseas, causing a significant dip in recent years. However, it still takes up 6.5% of the nation’s economy, with a total GDP of about $1,135.8 billion or so. So, it still has to be considered of significant importance.
But what does durable good manufacturing mean in physical terms? This field represents the creation of various machines and appliances, building processes, and infrastructure manufacturing.
7. Wholesale Trade – Helps Fuel the Economy
The American economy is heavily driven by the retail industry, with many of the fields above helping to contribute to its growth. However, retail ranks lower than wholesale, covering around $1,037.6 billion or 6.0% of the nation’s total GDP every year.
But what is the wholesale industry? Some people may not fully understand what this term indicates. Simply put, it is the process of storing goods before they are sold and delivered or selling them directly to the shops, restaurants, and businesses that provide them straight to the end client.
For instance, most restaurants and food trucks (except for those that may specialize in locally grown ingredients) buy their ingredients directly from wholesale companies. As a result, these companies often make more money than general retail – though retail is just a little behind wholesale.
8. Retail Sales – Driving the General Economy
While retail is relatively low on this list, it is in some ways the most critical sector of the economy. It represents the general day-to-day sales that help people live comfortable lives. The production of various goods and their sales profits add $1,014 billion to the economy for a GDP share of 5.8%.
This sector includes things like the food you buy for your home, the various goods that you use to keep your home comfortable, any alcohol that you may purchase, any random items you might buy (such as furniture), and even vehicle parts and sales to various individuals throughout the nation.
The overall ranking of this industry may rise and fall in various ways each year due to things like recessions and higher economies. However, it generally still contains the same general amount of value and usually finds itself at about this level when ranked using our method.
9. Non-Durable Good Manufacturing – A Vast Sector
While durable good manufacturing makes up more of the GDP than non-durable goods, this field is still an important one to consider. It produces around $954.8 billion every year, creating a GDP share of around 5.5%. Some expect this industry to grow even more in the future.
What does this field consist of, and why is it different than durable goods? First, it typically consists of a broader range of additional petroleum or coal products. These include gasoline, engine oil, diesel fuel, and other good produced using non-durable products.
That said, various types of textiles, apparel, and agricultural goods are also considered non-durable. The agricultural field, in particular, takes up a significant part of the industry, especially when combined with industrial areas like commercial elevator service for farms and silos.
10. Information – Another Critical Part of the Economy
Over the years, the information sector has become surprisingly important to many fields. But just how much money is in this field? It typically takes up around $807.9 billion of the economy for a GDP share of about 4.6%. But what does this field consist of, and why is it important?
Information is a pretty broad term, which is a pretty big reason it is one of the most significant factors for its growth. It will cover things like general publishing, such as the creation, printing, distribution, sale, and marketing of various books, newspapers, and more.
It also consists of media production, such as sound recordings, motion pictures, and even internet production. This field is likely only to increase as the years pass, so make sure to watch this list in the future to see what kind of changes you may expect in the future.
As you can see, many of the biggest industries in the nation are a little surprising. Who knew how much money is in real estate? Or in the healthcare field? What is particularly notable about this list is that these 10 fields represent almost 77% of the American economy. So, no matter what option you chose to invest in here, you should find yourself doing surprisingly well as an investor.