The economy is divided into 11 main sectors. A sector describes a large segment of the economy.
These sectors are further categorized into three major categories based on their sensitivity to economic fluctuations. These three groups include defensive category, cyclical category and sensitive category.
Here is a breakdown how these these sectors are grouped into their respective categories:
1. DEFENSIVE SECTORS
These sectors are typically less sensitive to economic downturns. People tend to need the goods and services they provide regardless of economic conditions.
Consumer Staples. This sector includes necessities such as food and beverages, and personal products. This includes producers of these goods as well as retail companies that sell them such as supermarkets.
Healthcare. This sector includes pharmaceuticals manufacturers, hospitals, health care equipment and service providers, and biotechnology and life sciences companies.
Utilities. This sector includes electric and gas companies, water companies and renewable electricity producers.
2. CYCLICAL SECTORS
These sectors are more sensitive to economic cycles. Their performance tends to rise and fall with the overall economy.
Basic Materials. This sector includes chemicals, construction materials, metals and mining, and paper and forest products.
Consumer Discretionary. This sector includes businesses whose demand fluctuates based on general economic conditions such as consumer durables, automobiles, hotels and restaurants, retailers and the like.
Financial Services. This sector includes commercial banks, insurance companies, consumer lenders, investment firms and the like.
Real Estate. This sector includes equity real estate investment trusts, as well as real estate management and development firms.
3. SENSITIVE SECTORS
These sectors are highly sensitive to economic changes and are the first to be affected by economic downturns.
Communication Services. This sector includes social media and traditional media companies as well as cable, landline and mobile telephone carriers.
Energy. This sector includes companies that explore, produce and sell oil and gas products as well as companies that supply equipment and services to them.
Industrials. This sector includes a wide variety of manufacturers and transportation companies such as defense and aerospace, airlines, railroads, machinery and the like.
Technology. This sector includes manufacturers and sellers of computer hardware, software, semiconductors and computer equipment in addition to providers of IT services.
Additionally, there are many specific industries that belong to each of those large sectors. You can explore these 11 main sectors of the economy in more detail here: https://www.superbusinessmanager.com/sector-analysis
