Heavy Industry

What is a 'Heavy Industry'

Relates to a type of business that typically carries a high capital cost (capital-intensive), high barriers to entry and low transportability. The term "heavy" refers to the fact that the items produced by "heavy industry" used to be products such as iron, coal, oil, ships, etc. Today the reference also refers industries that cause disruption to the environment in the form of pollution, deforestation, etc.

BREAKING DOWN 'Heavy Industry'

Industries that are typically considered heavy include:

1. Chemicals and plastics
2. Steel and oil refining, production
3. Mining
4. Industrial machinery
5. Mass transit (railways, airlines, shipbuilders)

Another trait of heavy industry is that it most often sells its goods to other industrial customers, rather than to the end consumer. Heavy industries tend to be a part of the supply chain of other products. As a result, their stocks will often rally at the beginning of an economic upturn and are often the first to benefit from an increase in demand.

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