The U.S. economic recovery was in full swing during the decade following the Great Recession. Before the recent COVID-19 pandemic, jobs were being created by the millions, and wage growth was on the rise. What industries propelled America’s self-contained economy?
Below are the five sectors that are have helped fuel the economy’s growth in the wake ofthe latest economic downturn. The selection is based on data from the Bureau of Labor Statistics (BLS) and industry perspectives.
Key Takeaways
- Driving the economic growth prior to the COVID-19 pandemic was marked by expansion in healthcare, notably the growth in healthcare-related jobs.
- Advances in technology, such as artificial intelligence and machine learning, have helped drive growth in other sectors.
- Other sectors making notable contributions to the economy over the last decade include construction, retail, and non-durable manufacturing.
1. Healthcare
The health sector helped the U.S. recover from the 2008 financial crisis. The sector added 2.8 million jobs between2006 and 2016, which was nearly seven times faster than the overall economy. During the ten years since 2008, the sector has grown jobs 20%, while the average rate for the economy was only 3%.
The Bureau of Labor Statistics expects healthcare jobs togrow at an annualized rate of 18% from 2016 to 2026, much faster thanthe rate of the rest of the economy.
Healthcare Management, a guide to healthcare degrees for prospective students, says there are four reasons for the booming healthcare sector. First, an increasingly aging population is creating a need for additional services. Second, chronic conditions suffered by the aging population are increasing the demand for healthcare workers.
Third, medical advances and improvements are expanding the type and number of jobs available. And finally,federal healthcare insurance reform has increasedthe number of people seeking routine medical care.
As a share of the nation's gross domestic product (GDP), health spending accounted for 17.7% in 2018. Additionally, investor interest in healthcare and biotech stocks continues.
2. Technology
The tech sector is a huge componentof the U.S.economy, according to Cyberstates 2019, an annual analysis of the nation’s industry published by CompTIA.Employment incomputer and ITis projected to grow 11%from 2019 to 2029, faster than the average for all occupations.
Demand for additionalworkers is stemming fromcloud computing—the collection, and storage of big dataand information security.
The impact of the tech industry has affectednearly every state, and, according to Cyberstates2019, the industry is ranked in the top five economic contributors in 23 statesand in the top 10 of 28 states.
Technology plays a role in almost all other sectors, such as healthcare, advanced manufacturing, transportation, education, and energy. TheInternet of Things, artificial intelligence, machine learning, autonomous vehicles, and augmented and virtual reality are all changing society and industries.
3. Construction
Construction has been a growth industry in all areas. This includes residential and nonresidential builders, contractors,and civil engineers. According to the Bureau of Labor Statistics, construction and extraction occupations areprojected to grow by 4% from 2019 to 2029, which is nearly as fast as the average for all occupations.
The growth is, in part, being driven by population growth, which is increasing demand fornew buildings, roads, and other structures.
Construction spending hit an annual rate of $1.365 trillionduring 2019, according to data from the Census Bureau.
4. Retail
The retail trade accounts for 5.5% of the nation's GDP, providing 9.6% of total employment in the U.S., according to the Bureau of Labor Statistics.
The National Retail Federation (NRF) notes that retail supports more than one-in-four U.S. jobs—or 52 million working Americans—and because the sector's employment ratehas improved, retailers have less of a need to hire seasonal workers.
The sector includes online retailers such as Amazon (AMZN) and eBay (EBAY), aw well as brick-and-mortar establishments.The NRF reported a 4.1% increase in retail holiday sales during November and December of 2019 compared to the same period in 2018.
5.Non-durable Manufacturing
The non-durable manufacturing industry producescommodities that are defined as having a lifespan of less than three years, such asgasoline, electricity, and clothing.
Non-durable manufacturing is a predominantpillar in the U.S. with a GDP value-added that's4.8% of the national GDP, according to the Federal Reserve. The non-durable manufacturing sector is less valuable than durable manufacturing; however, it employs more people and accountsfor 4.4 million jobs compared to 349,000 jobs from durable manufacturing.
The MAPI Foundation suggests annual export growth will increase thanks to increased manufacturing productivity. The Foundation points to increasingcapital spending, improved global economic conditions,and business tax reform that are motivatingbusinesses to invest in the manufacturing industry as factors that will boost manufacturing in the next fewyears.
The Bottom Line
The ITindustry was key to the economic recovery following the financial crisis and has influenced many other industries with advanced technologies, such as artificial intelligence and machine learning. Healthcare has benefited from these new technologies and a higher demand for products and services due to the growing and aging population.
As an expert in economic trends and industry dynamics, I have closely followed the developments shaping the U.S. economy over the past decade, particularly in the aftermath of the Great Recession and leading up to the COVID-19 pandemic. My insights are grounded in a comprehensive understanding of data sources, including the Bureau of Labor Statistics (BLS) and industry perspectives, which have been crucial in analyzing the trajectory of various sectors.
The article highlights key sectors that have played a pivotal role in driving the U.S. economic recovery. Let's delve into the concepts and industries discussed:
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Healthcare:
- The healthcare sector has been a significant driver of economic growth, adding 2.8 million jobs between 2006 and 2016, outpacing the overall economy.
- Factors contributing to its growth include an aging population, increased demand for healthcare services due to chronic conditions, medical advances, and federal healthcare insurance reforms.
- Projections from the Bureau of Labor Statistics indicate a continued annualized growth rate of 18% in healthcare jobs from 2016 to 2026.
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Technology:
- The technology sector, a major component of the U.S. economy, has witnessed substantial growth, with employment in computer and IT projected to grow 11% from 2019 to 2029.
- Cloud computing, big data, information security, and emerging technologies like artificial intelligence and machine learning have significantly influenced various industries.
- Technology's impact extends to healthcare, advanced manufacturing, transportation, education, and energy, transforming society and driving economic contributions in multiple states.
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Construction:
- Construction has been a growth industry, encompassing residential and nonresidential builders, contractors, and civil engineers.
- Population growth has been a key driver, leading to increased demand for new buildings, roads, and infrastructure.
- Construction spending reached a substantial annual rate of $1.365 trillion in 2019, according to data from the Census Bureau.
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Retail:
- The retail trade sector accounts for a significant portion of the nation's GDP (5.5%) and provides substantial employment (9.6% of total employment).
- Both online retailers, such as Amazon and eBay, and brick-and-mortar establishments contribute to the sector's impact.
- The National Retail Federation (NRF) reports positive trends, including a 4.1% increase in retail holiday sales during November and December of 2019 compared to the previous year.
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Non-durable Manufacturing:
- The non-durable manufacturing industry, producing short-lived commodities like gasoline, electricity, and clothing, is a substantial pillar of the U.S. economy.
- While less valuable than durable manufacturing, non-durable manufacturing employs a significant workforce, with 4.4 million jobs.
- The MAPI Foundation suggests factors such as increased manufacturing productivity, rising capital spending, improved global economic conditions, and business tax reform will contribute to annual export growth in this sector.
In conclusion, the interplay of these key sectors, including healthcare, technology, construction, retail, and non-durable manufacturing, has been integral to the U.S. economic recovery and growth over the past decade. The article underscores the importance of understanding these sectors and their contributions to the overall economic landscape.
