The primary sector extracts raw materials, the secondary sector manufactures goods, and the tertiary sector provides services. Notes and 14 questions answered.
Updated 24 Mar 2026 · Revise Right Team
Economic Sectors: Primary, Secondary, and Tertiary is part of Resource allocation in GCSE AQA Economics.
6 min
Reading time
44
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GCSE AQA
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Reviewed by Revise Right
Content review
What this lesson covers
The primary sector extracts raw materials, the secondary sector manufactures goods, and the tertiary sector provides services. Notes and 14 questions answered.
Define and distinguish between the primary, secondary, and tertiary sectors of the economy
Explain the difference between a good and a service with relevant UK examples
Describe the relative sizes of the three sectors in the UK economy today
Analyse how sector sizes in the UK have changed over time, including deindustrialisation
Key ideas to keep in view
Use this lesson to stay inside Resource allocation while connecting the detail back to the wider How markets work topic.
Primary Sector: The sector of the economy concerned with extracting raw materials from the natural environment, such as farming, fishing, mining, and forestry.
Secondary Sector: The sector of the economy concerned with manufacturing and construction -- turning raw materials into finished or semi-finished goods.
Tertiary Sector: The sector of the economy concerned with providing services rather than producing physical goods, such as banking, retail, education, healthcare, and entertainment.
Deindustrialisation: The long-term decline in the share of manufacturing (secondary sector) in a country's output and employment, often accompanied by growth in the service (tertiary) sector.
Good: A tangible, physical product that can be touched and stored, such as a car, a loaf of bread, or a smartphone.
Revision notes
Read the core explanations from Economic Sectors: Primary, Secondary, and Tertiary before testing yourself from memory.
1. Three Sectors of the Economy
Every business in the economy belongs to one of three sectors, depending on the type of activity it carries out. Think about a chocolate bar. Someone has to grow the cocoa beans (primary sector), someone has to manufacture the chocolate bar in a factory (secondary sector), and someone has to sell it to you in a shop (tertiary sector). These three sectors together make up the whole economy.
The Primary Sector
The primary sector is where production begins. Without it, there would be no raw materials for factories and no food on our tables. In the UK, key primary industries include North Sea oil and gas extraction, fishing off the Scottish coast, sheep farming in Wales, and arable farming in East Anglia. However, the primary sector now accounts for less than 2% of UK GDP and employment -- a dramatic change from 200 years ago when the majority of people worked on the land.
The Secondary Sector
The secondary sector takes raw materials from the primary sector and turns them into products we can use. A steel mill turns iron ore into steel beams. A Jaguar Land Rover factory in Solihull turns steel, glass, rubber, and electronics into cars. A construction firm turns bricks, timber, and concrete into houses. The UK secondary sector now accounts for roughly 18-20% of GDP. Important UK manufacturers include Rolls-Royce (jet engines in Derby), Nissan (cars in Sunderland), and AstraZeneca (pharmaceuticals in Cambridge).
The Tertiary Sector
The tertiary sector is by far the largest sector in the UK, accounting for around 80% of GDP and a similar share of employment. It includes an enormous range of activities: your teacher provides education services, your doctor provides healthcare services, Barclays provides financial services, and Tesco provides retail services. The City of London is one of the world's leading financial centres, and the UK's creative industries (film, music, gaming) are among the strongest globally. The dominance of the tertiary sector is a defining feature of the modern UK economy.
2. Goods vs Services
A key distinction in economics is between goods and services. The primary and secondary sectors mainly produce goods -- tangible, physical products you can touch, see, and store. A tin of beans, a car, a brick, and a smartphone are all goods. The tertiary sector mainly provides services -- intangible activities that cannot be touched or stored. A haircut, a train journey, a bank transfer, and a Netflix subscription are all services.
Key differences between goods and services
Feature
Goods
Services
Tangibility
Tangible -- can be physically touched
Intangible -- cannot be touched
Storage
Can be stored and sold later
Cannot be stored -- consumed at the point of delivery
Ownership transfer
Ownership passes to the buyer
No transfer of ownership -- the customer experiences the service
Approximate sector shares in the modern UK economy
Sector
Share of UK GDP (approx.)
Share of UK Employment (approx.)
Key UK Examples
Primary
Less than 2%
Less than 2%
North Sea oil & gas, fishing, farming
Secondary
18-20%
15-18%
Car manufacturing (Nissan, JLR), pharmaceuticals (AstraZeneca), construction
Tertiary
Around 80%
Around 80%
Financial services (City of London), NHS, retail, education, creative industries
The dominance of the tertiary sector makes the UK a service-based economy. Around four out of every five workers in the UK are employed in the service sector. Financial services alone contribute over £130 billion to UK GDP annually, and London is one of the top three global financial centres alongside New York and Hong Kong. Meanwhile, the primary sector's share has shrunk dramatically -- in 1800, around 35% of workers were in agriculture; today it is less than 2%.
4. How Sector Sizes Have Changed Over Time
The UK economy has undergone a dramatic structural change over the past 200 years. During the Industrial Revolution (late 1700s-1800s), workers moved from the primary sector (agriculture) to the secondary sector (factories). Cities like Manchester, Birmingham, and Sheffield grew rapidly as manufacturing boomed. By the mid-20th century, manufacturing employed millions of people and the UK was known as 'the workshop of the world'.
But from the 1970s onwards, a process called deindustrialisation began. Manufacturing declined sharply as factories closed, particularly in northern England, South Wales, and central Scotland. By 2025, manufacturing's share of UK employment had fallen to around 8%. At the same time, the tertiary sector grew enormously, driven by the expansion of financial services, technology, healthcare, and education. This shift is sometimes called the 'transition to a service economy'.
Why did deindustrialisation happen in the UK? Several factors combined. Competition from lower-cost producers in China and East Asia undercut UK manufacturers on price. Automation and technology replaced many manual factory jobs. Government policy in the 1980s prioritised financial services over traditional industry. Consumer spending shifted towards services (eating out, streaming, holidays) rather than manufactured goods. And rising wages in the UK made it cheaper for firms to relocate production overseas.
5. Worked Example
Worked example: Classifying UK Businesses by Sector
For each of the following UK businesses, identify the sector it belongs to and explain your reasoning: (a) a wheat farm in Lincolnshire, (b) a Nissan car factory in Sunderland, (c) Barclays bank, (d) a construction company building new homes. (4 marks)
Method: Classify each business by the nature of its main activity: extracting raw materials (primary), manufacturing/construction (secondary), or providing services (tertiary).
(a) A wheat farm in Lincolnshire is in the primary sector because it extracts raw materials (wheat) directly from the natural environment through agriculture. — Farming involves growing crops using natural resources, which is extraction from the environment.
(b) The Nissan car factory in Sunderland is in the secondary sector because it manufactures finished goods (cars) by transforming raw materials (steel, glass, rubber) into a final product. — Manufacturing involves turning raw materials into products -- the defining activity of the secondary sector.
(c) Barclays bank is in the tertiary sector because it provides financial services (savings accounts, loans, mortgages) rather than producing physical goods. — Banking is a service -- it is intangible and consumed at the point of delivery.
(d) A construction company building new homes is in the secondary sector because construction involves transforming raw materials (bricks, concrete, timber) into finished structures. — Construction is classified as secondary because it creates physical products (buildings), even though the work happens on-site rather than in a factory.
The shift from manufacturing to services has had major consequences for the UK. On the positive side, service-sector jobs are often cleaner, safer, and better-paid than factory work. The financial services industry generates huge tax revenue and export earnings. The UK's creative and tech sectors (gaming, film, fintech) are world-leading.
However, deindustrialisation has also caused significant problems. Former industrial areas like parts of the North East, South Wales, and central Scotland experienced high unemployment when factories closed, and some have never fully recovered. There is a growing regional divide between prosperous service-sector areas (especially London and the South East) and former industrial regions. Many ex-factory workers lacked the skills needed for new service-sector jobs, leading to structural unemployment. The UK also became more dependent on imports of manufactured goods, contributing to a trade deficit.
Sources and content standards
Published by Revise Right. Use the official specification reference to check the requirements for your course. Content updated: 2026-03-24.
Deindustrialisation is the long-term decline in the importance of manufacturing in a country's economy, measured by falls in manufacturing output as a share of GDP and in manufacturing employment. In the UK it has been particularly pronounced since the 1970s, with manufacturing's share of employment falling to around 8% by 2025.
What is the primary sector?
The primary sector is the part of the economy that extracts raw materials directly from the natural environment, through farming, fishing, mining, quarrying, forestry and oil extraction. UK examples include North Sea oil and gas, fishing off the Scottish coast and sheep farming in Wales, but it now accounts for less than 2% of GDP.
What are the primary, secondary and tertiary sectors?
The primary sector extracts raw materials from the natural environment, such as farming, fishing and mining. The secondary sector covers manufacturing and construction, turning raw materials into finished or semi-finished goods. The tertiary sector provides services rather than physical goods, such as retail, banking, education and healthcare.
What is a service-based economy?
A service-based economy is one where the tertiary sector is by far the largest, as in the UK, where around four out of every five workers are employed in the service sector. Financial services alone contribute over £130 billion to UK GDP annually.
Is construction in the secondary or tertiary sector?
Construction is in the secondary sector, because it transforms raw materials such as bricks, concrete and timber into finished physical structures, even though the work happens on-site rather than in a factory. Although a construction firm provides a service to its clients, the activity itself creates a tangible product.
Is banking a service?
Banking is a service, so banks such as Barclays are in the tertiary sector: they provide savings accounts, loans and mortgages rather than producing physical goods. A service is intangible, cannot be stored and is consumed at the point of delivery.
How big is each sector in the UK economy?
The tertiary sector is by far the largest in the UK economy, at around 80% of GDP and employment, making the UK a service-based economy. The secondary sector accounts for roughly 18-20% of GDP and 15-18% of employment, while the primary sector accounts for less than 2% of both.
Why did deindustrialisation happen in the UK?
UK deindustrialisation was caused by competition from lower-cost producers in China and East Asia, automation and technology replacing manual factory jobs, government policy in the 1980s that prioritised financial services, consumer spending shifting towards services, and rising UK wages making it cheaper for firms to relocate production overseas.
What are examples of UK secondary sector firms?
Examples of UK secondary sector firms are Rolls-Royce, making jet engines in Derby, Nissan, making cars in Sunderland, and AstraZeneca, making pharmaceuticals in Cambridge. The secondary sector covers manufacturing and construction, transforming raw materials into finished or semi-finished goods, and accounts for roughly 18-20% of UK GDP.
How big is the tertiary sector in the UK?
The tertiary sector is by far the largest sector in the UK, accounting for around 80% of GDP and a similar share of employment. It provides services rather than physical goods, including retail, banking, education, healthcare, transport and hospitality.
What are the consequences of deindustrialisation?
The consequences of deindustrialisation include high unemployment in former industrial areas such as the North East, South Wales and central Scotland, a regional divide with London and the South East, structural unemployment among ex-factory workers, and the UK becoming more dependent on imports of manufactured goods, contributing to a trade deficit.
Is a bakery in the primary or secondary sector?
A bakery is in the secondary sector because it manufactures bread, even though its wheat comes from a primary-sector farm. The sector depends on what the specific business does, not where its inputs come from.
How has UK employment changed between sectors over time?
UK employment has shifted between sectors over 200 years: during the Industrial Revolution workers moved from agriculture into factories, and from the 1970s deindustrialisation moved them into services. In 1800 around 35% of workers were in agriculture; today it is less than 2%, and manufacturing employs around 8%.
What are the advantages of a service economy?
The positive side of a service economy is that service-sector jobs are often cleaner, safer and better-paid than factory work, financial services generate huge tax revenue and export earnings, and the UK's creative and tech sectors, such as gaming, film and fintech, are world-leading.