The U.S. economy is finally recovering from the 2008 Great Recession. Jobs are being created by the millions, wage growth is picking up and foreign exports accounted for only 11.9% of the nation’s GDP in 2016, according to the latest data by Statista. These signs indicate a prosperous recovery and a healthy, self-sufficient economy.
What industries are propelling America’s self-contained economy? This article looks at the respective sectors that are both sustaining and fueling the economy’s continued growth in the wake of the latest economic downturn. The selection is based on data from the Bureau of Labor Statistics and industry perspectives.
1. Health Care
The health sector has helped the United States to recover from the financial crisis of 2007 to 2008. The sector added 2.8 million jobs between 2006 and 2016, which was a rate almost seven times faster than the overall economy. There has been a 20% growth in health care sector jobs since 2008 while the average rate for the economy was only 3%. According to the Bureau of Labor Statistics, health care jobs are expected to grow at a rate of 18% from 2016 to 2026, again, much faster than the rate of the rest of the economy.
According to Healthcare Management, a guide to healthcare degrees for prospective students, there are a few reasons for the booming health care sector. An increasing and aging population is creating a need for additional services and providers, chronic conditions suffered by the aging population are increasing the demand for health care workers, medical advances and improvements are expanding the type and number of jobs and Federal health care insurance reform (also called the Patient Protection and Affordable Care Act or Obama Care) has increased the number of people seeking routine medical care.
As a share of the nation's Gross Domestic Product, health spending accounted for 17.9 percent in 2016, up from 17.7 in 2015. Additionally, investor interest in healthcare and biotech stocks continues. According to Real Money, the first half of 2018 saw a rebound in the IPO market that had not been seen for 20 years, and it was driven partly by investor appetite for healthcare and technology stocks. From July 2017 to July 2018, over 60% of IPOs were for healthcare and tech stocks, according to data from Renaissance Capital.
The tech sector is a huge component of the U.S. economy, according to Cyberstates 2018, an annual analysis of the nation’s industry published by CompTIA. Employment among computer and IT is projected to grow 13% from 2016 to 2026, faster than the average for all occupations. Demand for additional workers is stemming from cloud computing, the collection and storage of big data and information security.
The impact of the tech industry has affected nearly every state and, according to Cyberstates 2018, the industry is ranked in the top five of economic contributors in 22 states and in the top 10 of 42 states. Technology plays a role in almost all other sectors such as health care, advanced manufacturing, transportation, education and energy. The Internet of Things, artificial intelligence, machine learning, autonomous vehicles, and augmented and virtual reality are all changing society and industries.
Construction in all areas is a growing industry including residential and nonresidential builders, contractors that install or service mechanical systems such as electricity, water, elevators and heating and cooling and civil engineering construction. According to the Bureau of Labor Statistics, construction and extraction occupations are projected to grow by 11% from 2016 to 2026, which is a rate faster than the average for all occupations, and to add close to 750,000 new jobs. The growth is stemming from overall economic and population growth, which is increasing demand for new buildings, roads, and other structures.
According to Cyberstates 2018, construction spending in February 2018 was $1.19 billion, which was an increase of 3% on 2017 and was the sixth year in a row that construction spending had gone up, according to U.S. Census Bureau data.
The retail trade accounts for 6% of the nation's GDP with a GDP value added of $905 billion. The retail industry is the largest employer in the United States, according to World Atlas, and 10% of the total employment in the United States is in retail. Data from the National Retail Federation shows that the industry accounts directly or indirectly for over 15 million jobs and, because the sector's employment rate has improved, retailers have less of a need to hire seasonal workers. The sector includes online retailers such as Amazon and eBay and brick-and-mortar establishments. The National Retail Federation (NRF) reported an increase of 4% in retail sales in November and December of 2017 compared to the same period in 2016.
5. Nondurable Manufacturing
The non-durable manufacturing industry produces commodities that are defined as having a lifespan of less than three years such as gasoline, electricity, and clothing. Non-durable manufacturing is a predominant pillar in the United States with a GDP value added of $821 billion or 6% of the national GDP, according to WorldAtlas. The non-durable manufacturing sector is less valuable than durable manufacturing; however, it employs more people and accounts for 4.4 million jobs compared to 349,000 jobs from durable manufacturing.
The MAPI Foundation projects that annual export growth will average 6% annually between 2018 and 2021 as a result of increased manufacturing productivity. The Foundation points to increasing capital spending, improved global economic conditions and business tax reform that are motivating businesses to invest in the manufacturing industry as factors that will boost manufacturing in the next few years.
The Bottom Line
Economic growth in the United States is flourishing and continuing upward. The IT industry has been key to the economy’s recovery and has influenced most other industries with digitalization and advanced technologies such as artificial intelligence and machine learning. Health care has benefited from new technologies and a demand for increased products and services due to the growing and aging population.