Classification of Industries
Industry is a general term that refers to all economic activities that deal with production of goods and services. Goods and services are key words when you talk of industry. We then expect industry to include the following sectors:
- Manufacturing
- Agriculture
- Energy
- Transport
- Communication
- Education
- Tourism
- Building and construction
- Trade
- Finance
- etc
Classification of the Manufacturing Industry
The manufacturing industry is the area of focus in the study of this module. Manufacturing
produces manufactured goods. This makes it distinct from other sectors like
agriculture which also produce goods. In manufacturing, materials are transformed
into other more valuable materials.
We define manufacturing industry as follows:
Manufacturing industry is a compartment of industry or economy which is
concerned with the production or making of goods out of raw materials by means
of a system of organized labour.
Manufacturing industry can be classified into two major categories namely, heavy
and light industry.
- Capital-intensive industries are classified as heavy while labour intensive industries are classified as light industries.
- Light industries are easier to relocate than heavy industries and require less capital investment to build. Using the above classification criteria, examples of heavy industries include those that produce industrial machinery, vehicles and basic chemicals.
Manufacturing sub-sectors
Because the raw materials and the actual products manufactured are so varied,
different skills and technologies are needed in manufacturing. Manufacturing is
therefore divided into sub-sectors which typically deal with category of goods such
as the following:
- Food, beverages and tobacco
- Textiles, wearing apparel, leather goods
- Paper products, printing and publishing
- Chemical, petroleum, rubber and plastic products
- Non-metallic mineral products other than petroleum products
- Basic metal products, machines and equipment.
- Let us now focus on the chemical, petroleum, rubber and plastic products subsector. We shall generally call it the chemical industry.
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