What Companies are in the Basic Industries Field?

If you’re looking for a new career, trying to decide on a major in college, or considering companies to include in your investment portfolio, you may have come across the term “basic industries.”

According to the U.S. Bureau of Labor Statistics, in 2019 there were over 6 million American firms classified by the NAICS (North American Industry Classification System) as “basic industries” companies, and they employed over 136 million workers. Companies in this category of business are key industries that account for more than 300 stock mutual funds, index funds, and exchange-traded funds on the market.

But what companies are in the basic industries field? This article explains what makes a company part of the basic industries sector, breaks down subcategories of the industry, and examines the question: “Is a job in basic industries a good career path?”

What makes a company part of the basic industries sector?

In short, companies in the basic industries field are businesses that supply raw materials for other industries to fabricate or manufacture goods. Basic industries begin with the exploration or discovery of raw materials and end with the extraction and processing of such materials.

Basic industries are one of the major sectors essential to both underdeveloped and developing economies, as they supply the bulk of materials for the products and services people consume.

What industry subcategories are classified as basic industries?

Companies classified as basic industries are divided into other large subsectors such as mining, basic chemical production, agriculture, and forestry as well as metal ore, oil, and gas extraction. These companies account for a wide variety of raw materials needed for the global production of goods.

For instance, the grain grown and processed in the Midwest is a U.S. basic industries product that effects the global market. Although some of this product is used domestically, the majority of the corn, soy, and wheat grown in the U.S. is produced specifically for export. These “raw materials” are sold to nations with inadequate grain production of their own, netting $396 million in 2020 in total export sales.

Are all businesses that work with raw materials a basic industries company?

All the basic industries companies work with raw materials, but not all companies that work with raw materials are considered a basic industries company.

For example, a mining company would classify as a basic industries company because it produces raw materials. However, even though a jewelry company works with raw mined metals, the business manipulates those raw materials to make a final product sold to consumers. The jewelry store would therefore be a non-basic industry classified as a business retailer.

Another example would be the production of some chemicals. A company producing basic chemical solutions that do not require engineering or complex processes to produce would qualify as a basic industries company.

On the other hand, companies involved in manufacturing and processing basic chemicals to produce end products would not be considered a basic industries company. An example of this is the production of industrial fertilizers and paint additives, which involve complex manufacturing.

Oil and gas extraction

Companies in the oil and gas extraction subsector operate and develop oil and gas. These operations also include the production of crude petroleum, the mining and oil extraction process from oil shale and oil sands, the production of natural gas, and the recovery of hydrocarbon liquids.

The job scope of these companies may include the following:

• Understanding the exploration and feasibility stage of crude petroleum
• Drilling, completing, and equipping wells
• Operating separators, emulsion breakers, desilting equipment, and field gathering lines
• All other activities in the preparation of oil and gas, up to the point of shipment from the producing property

Oil and gas extraction is a crucial basic industry. Some aspects of this subsector are a highly specialized process carried out by trained engineers or petroleum geologists.

Basic chemical production

The production of basic chemicals involves the extraction of organic and inorganic raw materials. This subsector is distinguished by the production of basic chemicals. Such industries create new and valuable compounds that are integral to chemical industries as a whole.

Not all companies that produce chemicals are considered basic industries. Synthetic chemists develop chemicals complex in nature and would be classified as industries related to non-basic industries. Basic chemicals would exclude pharmaceuticals and numerous other subsectors.

Chemicals and natural resources are interconnected industries that are integral pieces of modern economies. The chemical sector is a highly influential industry impacting many other subsectors such as plastics, food, automobile, and glass, to name a few.

Mining industry

In the mining industry, minerals are extracted from naturally occurring underground sources. Extraction methods can be achieved with such techniques as underground or surface mining, well operation, and seabed mining.

Revenue of the top 40 global mining companies, representing a vast majority of the entire industry, amounted to some $925 billion (all figures listed are in U.S. dollars) in 2021. Projected revenue in 2022 from mining and quarrying amounts to $103 billion — current figures suggest an annual growth rate in this subsector of 3.93% (CAGR 2022-2025).

Rare earth

Various industries worldwide depend on the supply of unearthed minerals and rare earth commodities. Precious metals like gold and silver are often the only material option for many high-tech companies — these metals are still a driving factor in world finance.

In 2021, China was the world’s largest rare earth producer, accounting for 60% of the global market. This figure has grown a bit in comparison with the country’s 2020 58.3% market share. The U.S. rare earth production share, although second in the world, was comparatively much lower in 2021, accounting for 15.35% of the global market share.

Crude steel production

In 2021, the world crude steel production for the 64 countries reporting to the World Steel Association amounted to over 158 million metric tons. Although the Covid-19 pandemic, starting in 2020, did not contribute to a large slump in production, a drop in steel prices impacted revenues in such companies as ArcelorMittal and Nucor Corporation. Although the Covid-19 pandemic did not contribute to a large slump in production, a drop in steel prices impacted revenues in such companies as ArcelorMittal and Nucor Corporation.

Much of the world’s steel production does not originate in the U.S., but rather in China, which remains the world’s largest steel producer. In 2021, China produced 86.2 metric tons of crude steel, compared to only 7.2 metric tons in the U.S.

Agricultural and food sectors

Farming is one of the oldest industries and consists of work such as cultivating crops and raising livestock used for food or biofuels. Major crop commodities in this industry subsector include corn, soybean, hay, rice, and wheat.

Livestock mainly concentrates on cattle and dairy farming, hog and pig farming, poultry and egg production, and sheep and goat farming.

Agriculture global supply chains

Due to the world population rising, and subsequent demand for food and agricultural products, agricultural productivity is increasingly fundamental to a sustainable global food supply. Agriculture is also a large export industry that contributes to a lively economic chain.

The February 2022 Russian invasion of Ukraine and the effects of the COVID-19 pandemic have both impacted food commodity production around the world. Due to supply and demand, prices have nearly doubled compared to those during the global food crisis from 2010 to 2011.

Smart farming

Recent technological developments have been used to enhance agricultural productivity. Smart farming and agri-robotic techniques have become some of the most influential agricultural trends to impact this industry in decades.

These techniques aid farmers in improving efficiency and providing more sustainable usage of resources. Additionally, the demand for methods such as vertical farming is expected to increase, reducing the land required for agricultural needs.

Forestry and logging subsector

Industries in the forestry and logging subsector grow and harvest commodities such as timber. This can either be on a long production cycle (i.e., of 10 years or more) or on a short production cycle. Short production forestry or logging companies (such as Christmas tree growers) use different production processes than long production cycles, resulting in those similar to crop production.

The forest and logging subsector is a major contributor to the U.S. economy. These collected raw materials can then be processed for use by other companies in the paper or pulp industries.

Contrary to other industries, each region of the U.S. generally specializes in different components of this subsector. Softwood lumber products are primarily produced in the Western and Southern U.S., while hardwood lumber products are primarily produced in Eastern states. The paper and pulp industry are dependent on the procurement of these products.

What companies are in the basic industries field?

If you are looking for a thriving career path, there are many companies in the basic industries field that would make for good career options.

• Oil and gas industry. Three of the U.S.’s largest companies are included in the basic industries sector, and all of them are in the oil subsector. These three businesses are ExxonMobil, Chevron, and Marathon Petroleum. In mid-June 2022, ExxonMobil’s revenues were nearly $307 billion.
• Mining industry. Some of the largest companies in the mining business are Newmont, Southern Copper, and Freeport-McMoRan. U.S. mines produced approximately $90.4 billion in mineral commodities in 2021 — a $9.7 billion increase from the 2020 total of $80.7 billion.
• Chemical industry. As for companies in the chemical industry, in 2020 Dow led the market with sales reaching $38.5 billion and posted a 22% gain to $55 billion in 2021. Other leading companies in this sector include LyondellBasell Industries and DuPont.
• Agricultural and forestry. As of 2021, the top three agricultural producers in the U.S. was Cargill, Archer-Daniels-Midland, and Bayer Crop Science. Cargill collected an extremely high net income of nearly $5 billion, up 63% from the previous year.

Is a job in basic industries a good career path?

Most positions in a basic industry sector can be a great option for a growing career, as many of these positions aren’t just one category of work, but rather involve a large umbrella of work types. Many of these companies offer a wide variety of positions, making for plenty of options to choose from.

The following tables show employment statistics from various subindustries. These tables provide data that can help you decide if a basic industry career path is the right choice for you.

Does it take long to get a basic industries career?

Career paths in basic industries have no defined singular timeline because of the variety of job opportunities available. The time it takes to get a job depends on the specific job choice and learning speed. Entry-level careers may require little time to land a job, whereas more technical careers can require more than eight years of education.

As an example, career paths such as petroleum geologists generally need at least a bachelor’s degree for entry-level positions. In addition, in several states, geoscientists may need a license to offer their services to the public. To receive the education and licensing required will take several years.

In some companies, certain positions require on-the-job knowledge that cannot be learned at educational centers. A career path of this type requires experience in the company to achieve the in-depth understanding essential to fill the position.

How many jobs are created by the basic industry sectors in the United States?

The following tables are taken from the U.S. Bureau of Labor Statistics and provide statistics of employment, job creation, openings, and hires in basic industries companies.

In addition to the number of jobs available in basic industries, the unemployment rate for this area of work has decreased from 9.4% in February 2022 to 3.1% in May 2022.

FAQs

Are engineering skills essential for basic industries jobs?

Although there are some fields of work in basic industries companies that require engineering skills, you won’t need to have an engineering education for most jobs. There are many positions available in management, administration, finance, IT, computer numerical control, health and safety officers, and hands-on laborers that don’t require such knowledge.

What are the easiest jobs to get in the basic industries field?

Entry-level jobs are typically the easiest jobs to get in the basic industries field. These positions are available across a large variety of basic industries. Keep in mind though that you will likely need to pursue some form of higher education to be promoted to certain positions.