Stages of Production

Production within an economy can be divided into three main
stages: primary, secondary and tertiary.

Primary Production

Also known as the extractive industries

Primary production involves the extraction of raw materials
(e.g. farming, forestry, fishing, and mining).

There is little value added in primary production. The aim is
usually to produce the highest quantity at lowest cost to a
satisfactory standard.

Secondary Production

Also known as manufacturing industries

Secondary production involves transforming raw materials into

There are two main kinds of goods:-

Consumer goods – e.g. washing machines, DVD players. As
the name implies, these are used by consumers

Industrial / capital goods – e.g. plant and machinery,
complex information systems. Industrial and capital goods
are used by businesses themselves during the production

In the secondary production sector, value is “added” to the
raw material inputs e.g. foodstuffs are transformed into ready
meals for sale in supermarkets; metals, fabrics, and plastics
are transformed into motor vehicles.

There are many different industry sectors in secondary
production. For example:

Electronic instruments
Car building

Tertiary Production

Also known as the service industries

Tertiary production is associated with the provision of
services (an intangible product). As with the secondary
sector, there are many tertiary production markets. Good
examples include:

Private healthcare and education