basic industry

Definition

Industrial sector which exports all or nearly all of its production. Basic industries, as a result of their foreign exchange earnings, create new incomes and additional spending power in their country's economy. Therefore any drastic or inordinate change in a basic industry's output or earnings will produce correspondingly widespread and deep effect on the entire local economy. In contrast, changes in the non-basic or support industries will only require a readjustment of incomes and spendings patterns, and the country's overall economic condition will remain largely unaffected.