What is a market sector? Definition and meaning

The Market Sector is a part of the economy, usually broader than an industry. Two industries may form part of one market sector. For example, the pharmaceutical and medical devices industries are part of the health care sector.

The world’s major stock markets, and most of the smaller ones, are divided into market sectors so that company stocks that compete directly with one another are listed together.

Market sector in the bond markets refers to the type of issuer, i.e. corporate, utility, government or state.

Market Sector
Global Industry Classification Standard (GICS). Image created by Market Business News.

In marketing, the term has the same meaning as market segments, i.e. parts of the mass market that can be specifically targeted in advertising campaigns.Global Industry Classification Standard

Market Sector by CIGS

MSCI and Standard & Poor’s developed an industry taxonomy in 1999, called GICS (Global Industry Classification Standard). GICS is widely used today by the global financial community.

It breaks down market sectors as follows: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Telecommunication Services, and Utilities.

Analysts commonly specialize in certain market sectors. For example, an analyst at a large research firm may cover only medical device, pharmaceutical and biotech firms, i.e. the health care sector.

The four sectors of an economy

Economists say that a national economy is divided into four sectors:

  • Primary Sector

This sector includes agriculture, mining and forestry. The extraction of raw materials and harvesting of natural products from the earth.

  • Secondary Sector

The next step comprises the making of things, such as manufacturing, construction and processing.

  • Tertiary Sector

This is the services (intangibles) sector and includes financial services, consultancy, retailing, entertainment, and professional services.

  • Quaternary Sector

This sector, which is also known as the “Knowledge Sector,” is at the forefront of innovation, specializing in research and development, IT, AI, businesses consulting. It propels the economy with new ideas.

According to simple.wikipedia.org:

“Quaternary sector refers to the shift beyond the services sector by some economies, usually used to refer to the shift towards highly specialised, knowledge based and more technologically orientated sectors. Examples include some information services such as cloud computing, and research and development.”

The delineation of market sectors is increasingly influenced by technological innovation and shifting consumer preferences, leading to the emergence of new sectors and the evolution of existing ones.

Market sector – vocabulary and concepts

There are many compound nouns in the English language that contain the term “market sector.” Let’s take a look at some of them, their meanings, and how we can use them in a sentence:

  • Market Sector Analysis

The examination and evaluation of different market sectors to understand their performance and trends.
Example sentence: “The market sector analysis revealed that technology and healthcare are currently leading in growth.”

  • Market Sector Index

A statistical measure that tracks the performance of a specific sector of the market.
Example sentence: “Investors often look at the market sector index to decide where to put their money.”

  • Market Sector Leader

A company that is the most influential or highest-performing within a particular market sector.
Example sentence: “In the renewable energy market sector, that company is considered the market sector leader.”

  • Market Sector Breakdown

A detailed categorization of a market into its respective sectors.
Example sentence: “Before investing, she reviewed the market sector breakdown to understand the various industry contributions.”

  • Market Sector Fund

An investment fund that focuses on stocks within a specific market sector.
Example sentence: “He invested in a market sector fund dedicated to biotechnology.”

  • Market Sector Dynamics

The forces and changes that affect the growth, stability, and nature of different market sectors.
Example sentence: “The market sector dynamics can shift rapidly with technological advancements.”

  • Market Sector Growth

The increase in size and value of a particular market sector over time.
Example sentence: “Market sector growth is particularly strong in the digital services area this year.”

Educational Video – What are Market Sectors?

This video, from our YouTube partner channel – Marketing Business Network – explains what ‘Market Sectors’ are using simple and easy-to-understand language and examples.