Service sector of the U.S. - statistics & facts
Industries in the United States are divided into three major economic categories based on the resource that the industry creates or provides. In the primary sector, raw materials are extracted or gathered. The secondary, or manufacturing sector, creates finished goods. The third category is the service sector, which is arguably the largest of the three. Also known as the tertiary sector, the service sector stands apart from the other economic tiers due to its production of intangible goods.
The service sector does not extract or grow any materials. Instead, the service sector is broad in nature, and comprises industries that provide services to customers. These service may include training, consulting, and transportation that supplement the other two sectors, making it an instrumental and often final step to their success. The tertiary sector can also produce services less related to resource extraction and manufacturing, such as construction, medical care, maintenance, repair, administration, and gastronomy.
However, there is still some dispute as to which industries should be included in this calculation. Some industries seem to switch sector classification from one institution to the next. For example, the United States Bureau of Economic Analysis (BEA) classifies the construction industry as a production industry. In their reports it can be found with the goods-producing industries and its contribution to the GDP is added to the manufacturing sector's value. Alternatively, the Institute for Supply Management (ISM) considers construction to be a part of the service sector. In 2023, the construction industry made up about 4.4 percent of the national GDP.
Providing employment opportunities is not the only way through which the service sector bolsters the U.S. economy. Although the service sector produces intangible services, there is still a strong market for importing and exporting services. In the U.S., the value of exported services has continued to increase in recent years. In April 2024, the value stood at 90.94 billion U.S. dollars, which was an increase of nearly six billion U.S. dollars from the previous year. Almost 16 billion U.S. dollars of the exported services that month were financial services. That same month, the value of imported services in the United States was around 66.3 billion U.S. dollars.
The service sector does not extract or grow any materials. Instead, the service sector is broad in nature, and comprises industries that provide services to customers. These service may include training, consulting, and transportation that supplement the other two sectors, making it an instrumental and often final step to their success. The tertiary sector can also produce services less related to resource extraction and manufacturing, such as construction, medical care, maintenance, repair, administration, and gastronomy.
Types of Services
In 2021, the services sector contributed around 77.6 percent to the GDP of the United States. Among the service sector, the professional, scientific, and technical services industry has been the most dominant in recent years. The real estate and rental leasing industry has contributed the most to the U.S. economy in recent years, adding more than 3.67 trillion U.S. dollars to the GDP in 2023. That same year, the accommodation and food services industry contributed over 900 billion U.S. dollars to the GDP.However, there is still some dispute as to which industries should be included in this calculation. Some industries seem to switch sector classification from one institution to the next. For example, the United States Bureau of Economic Analysis (BEA) classifies the construction industry as a production industry. In their reports it can be found with the goods-producing industries and its contribution to the GDP is added to the manufacturing sector's value. Alternatively, the Institute for Supply Management (ISM) considers construction to be a part of the service sector. In 2023, the construction industry made up about 4.4 percent of the national GDP.
Purchasing Manager’s Index
In the United States, the Services Purchasing Manager's Index (PMI) can be used for an in-depth breakdown of the service sector. The PMI is based on a survey that is sent to more than 400 companies in 19 primary industries, which are weighted by their overall contribution to the nation's GDP. Each PMI consists of a set of indices from an economic sector that are used to measure the overall health of that sector. For the service sector, these indices are business activity, new orders, employment, and supplier deliveries. Their performance is reflected in the sector's PMI as an overall percentage. An index value above 50 percent indicates economic growth while a value below 50 percent shows a negative situation. For example, the employment PMI of the service sector shows that employment in the sector was declining in May 2024, with a value of 53.8, but ultimately fluctuated throughout the year.Employment and Trade
As a whole, the improvement of modern technology has induced the growth of the service sector, making it increasingly valuable. As a biproduct of the sector’s expansion, there has also been a significant increase in the number of employment opportunities across service industries. Within the transportation and warehousing industry alone, it is projected that the number of employees will continue to increase from 5.98 million in 2019 to 6.1 million in 2026.Providing employment opportunities is not the only way through which the service sector bolsters the U.S. economy. Although the service sector produces intangible services, there is still a strong market for importing and exporting services. In the U.S., the value of exported services has continued to increase in recent years. In April 2024, the value stood at 90.94 billion U.S. dollars, which was an increase of nearly six billion U.S. dollars from the previous year. Almost 16 billion U.S. dollars of the exported services that month were financial services. That same month, the value of imported services in the United States was around 66.3 billion U.S. dollars.
