Heavy Industry

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Capital

    1) Financial assets or the financial value of assets, such as ...
  2. Chemicals Industry ETF

    An exchange-traded fund that invests in manufacturers of chemicals. ...
  3. Capital Expenditure - CAPEX

    Funds used by a company to acquire or upgrade physical assets ...
  4. Capital Goods

    1. Any tangible assets that an organization uses to produce goods ...
  5. Capital Intensive

    A business process or an industry that requires large amounts ...
  6. Rust Bowl

    A geographic region that was formerly a manufacturing or industrial ...
Related Articles
  1. Great Company Or Growing Industry?
    Markets

    Great Company Or Growing Industry?

  2. Industry Handbook
    Investing Basics

    Industry Handbook

  3. The Economics Of Labor Mobility
    Economics

    The Economics Of Labor Mobility

  4. What Is Opportunity Cost And Why Does ...
    Economics

    What Is Opportunity Cost And Why Does ...

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center